Parent Company acquires Subsidiary Company on September 1, 2020. Parent seeks an independent valuation for an item of property, plant and equipment acquired in the combination, and the valuation was not complete by the time Parent authorized for issue its financial statements for the year ended December 31, 2020. At the acquisition date, the item of property, plant and equipment had a remaining useful life of five years with no residual value. In its 2020 annual financial statements, Parent recognized a provisional fair value for the asset of P300,000. Fourteen months after the acquisition date, Parent received the independent valuation, which estimated the asset's acquisition-date fair value as P400,000, How much is the adjustment in goodwill as a result of the measurement period adjustment during 2021?

Parent Company acquires Subsidiary Company on September 1, 2020. Parent seeks an independent valuation for an item of property, plant and equipment acquired in the combination, and the valuation was not complete by the time Parent authorized for issue its financial statements for the year ended December 31, 2020. At the acquisition date, the item of property, plant and equipment had a remaining useful life of five years with no residual value. In its 2020 annual financial statements, Parent recognized a provisional fair value for the asset of P300,000. Fourteen months after the acquisition date, Parent received the independent valuation, which estimated the asset's acquisition-date fair value as P400,000, How much is the adjustment in goodwill as a result of the measurement period adjustment during 2021?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

See similar textbooks

Similar questions

Parent Company acquires Subsidiary Company on September 30, 2020. Parent seeks an independent valuation for an item of property, plant and equipment acquired in the combination, and the valuation was not complete by the time Parent authorized for issue its financial statements for the year ended December 31, 2020. At the acquisition date, the item of property, plant and equipment had a remaining useful life of five years with no residual value.In its 2020 annual financial statements, Parent recognized a provisional fair value for the asset of P300,000. Five months after the acquisition date, Parent received the independent valuation, which estimated the asset’s acquisition-date fair value as P400,000.What is the increase in goodwill as a result of the measurement period adjustment during 2021?
Parent Company acquires Subsidiary Company on September 1, 2020. Parent seeks an independent valuation for an item of property, plant and equipment acquired in the combination, and the valuation was not complete by the time Parent authorized for issue its financial statements for the year ended December 31, 2020. At the acquisition date, the item of property, plant and equipment had a remaining useful life of five years with no residual value. In its 2020 annual financial statements, Parent recognized a provisional fair value for the asset of P300,000. Fourteen months after the acquisition date, Parent received the independent valuation, which estimated the asset’s acquisition-date fair value as P400,000. How much is the adjustment in goodwill as a result of the measurement period adjustment during 2021?
On April 30, 2020, Sa Young Nam Company approved a plan to dispose of a segment of its business. At this date, the entity is committed to a plan to sell the segment and classifies its assets as Held for Sale. The carrying value of the segment's net assets on April 30 was P800,000. In compliance with IFRS 5, no further depreciation or amortization was taken up on these assets until they were sold in November. During November, disposal costs incurred by Sa Young Nam totaled P22,500. During the period January 1, 2020 through November 30, 2020, the segment had total revenues of P4,500,000 and total selling and administrative expenses of P4,080,00o. On November 30, 2020, the segment's net assets were sold for P850,000. The income tax rate is 30%. What is the single amount reported as discontinued operations in Sa Young Nam' profit or loss for 2020? A. P447,500 B. P397,500 С. Р313,250 D. P278,250
Manara Corporation acquired Sama Products on January 1, 2019 for $4,000,000, and recorded goodwill of $750,000 as a result of that purchase. At December 31, 2019, Sama Products had a carrying value of $3,500,000, Also, it is determined that the current recoverable amount value of the Sama division is $2,900,000 at that time. What amount of loss on impairment of goodwill should Manara record in 20197 OA S710,000 OB $600,000 OC S480,000 OD S0
Tyra-Jay
On July 1, 2020, Philip Company acquired the net assets of Shayne Company for a consideration transferred of P32,000,000. At the acquisition date, the carrying amount of Shayne’s net assets was P20,000 and a temporary appraisal of P28,000,000 was attributed to the net assets. At December 31, 2020, a provisional fair value of P27,000,000 was attributed to the net assets. An additional valuation received on March 31, 2021 increased this provisional fair value by P2,000,000 and on May 31, 2021 this fair value was finalized at P30,000,000. Goodwill is tested for impairment on December 31, 2021 and deemed impaired by P200,000. What amount should the surviving company present for goodwill in its separate statement of financial position as of December 31, 2020?
Harms acquires Blake on January 1, 2015, for $1,000,000. The amount of $800,000 is assigned to identifiable net assets. Goodwill is being impairment tested on December 31, 2019. There have not been any prior impairment adjustments. The following values apply on that date: Estimated fair value of the Blake operating unit . . . . . . . . . . . $1,200,000 Fair value of net identifiable assets (excluding goodwill) . . . . . 1,120,000 Book value of net identifiable assets (including goodwill) . . . . 1,250,000 The book values include those resulting from assignment of fair value to accounts included in the January 1, 2015, acquisition. Is goodwill impaired? If it is, what is the amount of the impairment adjustment?
On January 1, 2025, Lili Company acquired the identifiable net assets of Jen Inc. On this date, the identifiable assets acquired and liabilities assumed have fair values of P 7,680,000 and P4,320,000 respectively. Lili Co. incurred the following acquisition related costs: legal fees, P48,000; due diligence costs, P48,000; and general and administrative costs of maintaining an internal acquisition, P96,000. As consideration, Lili Co. transferred 9,600 of its own shares with par value and fair value per share of P400 and P500 respectively, too Jen's former owners. Costs of registering the shares (previously issued and newly issued) amounted to P192,000 (P24,000 pertains to listing fees of previously issued shares). How much is the total amount charged to profit or loss in relation to the transaction above?
ABC Company accounted for noncurrent assets using the cost model. On December 31, 2021, the entity classified an equipment as held for sale. At that date, the carrying amount of the equipment was P1,600,000, the fair value was estimated at P1,300,000 and the cost of disposal at P200,000. On January 10, 2022, the equipment was sold for net proceeds of P1,200,000. Impairment loss for the year 2021 a. 200,000b 500,000c. 300,000d. 100,000
Affable Company purchased an equipment for P5,000,000 on January 1, 2020. The equipment had a useful life of 5 years with no residual value. On December 31, 2020, the entity classified the equipment as held for sale. On such a date, the fair value less cost of disposal of the equipment was P 3,500,000. On December 31, 2021, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the equipment but to continue to use it. On December 31, 2021, the fair value less cost of disposal of the equipment was P2,700,000 Required:1. Compute the carrying value of the equipment on December 31, 2020 before reclassification as held for sale.2. Compute the amount of impairment loss in 20203. Compute the amount to be included in profit or loss in 2021 as a result of the reclassification of the equipment to property, plant and equipment4. Compute the depreciation of the equipment for 20225.Compute the adjusted carrying…
Shak Company acquired a financial instrument for P4,000,000 on March 31, 2020. The financial instrument is classified as financial asset at fair value through other comprehensive income. The direct acquisition cost incurred amounted to P700,000. On December 31, 2020, the fair value of the instrument was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are estimated at P600,000. What gain should be recognized in statement of financial position for the year ended December 31, 20207 Select the correct response 900,000 200,000 800,000
Wombat Ltd has acquired all the shares of Emu Ltd. During 2020-2021, the following transactions have occurred: Wombat Ltd acquired a motor vehicle from an external vendor for $35,000 on 1 July 2020, 20% depreciation p.a., and sells it to its subsidiary, Emu Ltd, for $32,000 on the same day. Emu Ltd charges 25% depreciation p.a. on the vehicle. Prepare the consolidation worksheet entries at 30 June 2021 (current year). Prepare the consolidation worksheet entries at 30 June 2022 (next year