Identifiable Intangibles and International Foods, a U.S. company, acquired two companies in 2013. As a result, its consolidated financial statements include the following acquired intangibles: Intangible Asset Customer relationships Date of Acquisition Fair Value at Date of Acquisition Useful Life January 1, 2013 Favorable leaseholds Brand names Goodwill June 30, 2013 June 30, 2013 January 1, 2013 Goodwill was assigned to the following reporting units: Asia $80,000,000 South America 120,000,000 Europe Total 200,000,000 $400,000,000 $3,200,000 10 years 4,800,000 14,400,000 Indefinite 400,000,000 Indefinite 12 years It is now December 31, 2014, the end of International Foods' accounting year. No impairment losses were reported on any intangibles in 2013. Assume that International Foods bypasses step 0 of the goodwill impairment test. The following information is available on December 31, 2014: Intangible Asset Sum of Future Expected Undiscounted Cash Flows Sum of Future Expected Discounted Cash Flows Customer relationships Favorable leaseholds Brand names $960,000 4,800,000 11,200,000 $720,000 3,520,000 5,600,000 Reporting Unit Unit Book Value Unit Fair Value Asia $240,000,000 $320,000,000 South America Europe 160,000,000 280,000,000 480,000,000 400,000,000 Unit book values are already adjusted for appropriate 2014 amortization and impairment of identifiable intangibles. Compute 2014 amortization expense and impairment losses on the above intangibles, following U.S. GAAP Enter answers in millions, using decimal places when applicable. (in millions) Amortization expense - identifiable intangibles $ Impairment losses - identifiable intangibles Goodwill impairment loss Total

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

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Transcribed Image Text:Identifiable Intangibles and International Foods, a U.S. company, acquired two companies in 2013. As a result, its consolidated financial statements include the following acquired intangibles: Intangible Asset Customer relationships Date of Acquisition Fair Value at Date of Acquisition Useful Life January 1, 2013 Favorable leaseholds Brand names Goodwill June 30, 2013 June 30, 2013 January 1, 2013 Goodwill was assigned to the following reporting units: Asia $80,000,000 South America 120,000,000 Europe Total 200,000,000 $400,000,000 $3,200,000 10 years 4,800,000 14,400,000 Indefinite 400,000,000 Indefinite 12 years It is now December 31, 2014, the end of International Foods' accounting year. No impairment losses were reported on any intangibles in 2013. Assume that International Foods bypasses step 0 of the goodwill impairment test. The following information is available on December 31, 2014: Intangible Asset Sum of Future Expected Undiscounted Cash Flows Sum of Future Expected Discounted Cash Flows Customer relationships Favorable leaseholds Brand names $960,000 4,800,000 11,200,000 $720,000 3,520,000 5,600,000 Reporting Unit Unit Book Value Unit Fair Value Asia $240,000,000 $320,000,000 South America Europe 160,000,000 280,000,000 480,000,000 400,000,000 Unit book values are already adjusted for appropriate 2014 amortization and impairment of identifiable intangibles. Compute 2014 amortization expense and impairment losses on the above intangibles, following U.S. GAAP Enter answers in millions, using decimal places when applicable. (in millions) Amortization expense - identifiable intangibles $ Impairment losses - identifiable intangibles Goodwill impairment loss Total

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