Under PFRS for SME's, goodwill arising from business combination Charged to retained earnings after the acquisition is completed Never amortized but tested for impairment at least annually To be amortized over useful life or if useful life cannot be determined, over 10 years Amortized over 40 years or its useful life, whichever is shorter

Under PFRS for SME's, goodwill arising from business combination Charged to retained earnings after the acquisition is completed Never amortized but tested for impairment at least annually To be amortized over useful life or if useful life cannot be determined, over 10 years Amortized over 40 years or its useful life, whichever is shorter

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Under IASB for small and medium entities, goodwill: a. is subject to impairment procedures. b.…

A: Goodwill is an intangible asset, It is connected to the acquisition of one business by another.…

Q: The revaluation-related entry on the company's income stat Income Statement ($) A -5,700 B -2,100 C…

A: An income statement is one of the three important financial statements used for reporting a…

Q: On 31 December 2023, the statement of financial position of Dominic Ltd showed the following…

A: Revaluation of AssetsRevaluation of assets refers to the process of assessing the fair market value…

Q: Impairment of a CGU ✰✰ Bow Ltd reported the following assets in its statement of financial position…

A: The first step is to calculate the carrying amount of the assets. The carrying amount is the…

Q: Wember Company acquired a subsidiary company on December 31, 2015, and recorded the cost of the…

A: The process of recording business transactions in the books of accounts for the first time is…

Q: When an entire interest in a passive activity is disposed of any passive loss carryover with respect…

A: Step 1 Passive activity loss rules that restricted using passive losses to offset ordinary income or…

Q: Which of the following companies has a disclosure for which FASB ASC 450 applies, but FASB ASC 275…

A: The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 450…

Q: 1. Prepare any necessary journal entries associated with the three classes of assets for the year…

A: Hey there since you have posted multiple questions, we can answer only first question, please…

Q: A non-current asset with a carrying amount of $2400 was sold by the parent to its subsidiary for…

A: The first step in preparing the consolidation worksheet adjusting entries is to identify the…

Q: Goodwill arising from business combination is Charged to retained earnings after the acquisition…

A: Last option i.e. Never amortized, is the correct answer.

Q: A purchased patent that has a remaining legal life of 15 years should be * Amortized over 20 years…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: On December 31, an entity had a reporting unit that had a book value of $3,450,000, including…

A: The goodwill is a type of intangible asset of the company and it is acquired and recorded in the…

Q: Splish Brothers Ltd. is a publicly listed company following IFRS. Assume that on December 31. 2020.…

A: The process of recording business transactions in the books of accounts for the first time is…

Q: dditional Information: a) On the date of acquisition, an item of equipment of Man United. Ltd with a…

A: The consolidation statement denotes the combined financial information of parent and subsidiary…

Q: Assume that ABC, Inc, acquires a competitor's assets on June 10, 2020. The purchase price was…

A: As per section 197, intangible assets, any intangible asset acquired in relation to the acquisition…

Q: 5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Basic Company has a long-term plant asset with the following information as of the end of the year:…

A: Impairment loss arises when the recoverable amount of asset is less than the carrying value of the…

Q: A fixed asset with a cost of $25,974 and accumulated depreciation of $23,377 is traded for a similar…

A: Correct option is $38742

Question

Under PFRS for SME's, goodwill arising from business combination

Charged to retained earnings after the acquisition is completed

Never amortized but tested for impairment at least annually

To be amortized over useful life or if useful life cannot be determined, over 10 years

Amortized over 40 years or its useful life, whichever is shorter

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 : Explanation

VIEW

Step 2 : Answer

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

IIn 2018, Martin Corp. acquired Glynco and recorded goodwill of $100 million. Martin considers Glynco a separate reporting unit. By the end of 2021, the net assets (including goodwill) of Glynco are $320 million and its estimated fair value is $260 million. The amount of the impairment loss that Martin would record for goodwill at the end of 2021 is:
A6 In 2022, Alliant Corporation acquired Centerpoint Incorporated for $339 million, of which $59 million was allocated to goodwill. At the end of 2024, management has provided the following information for a required goodwill impairment test: Fair value of Centerpoint Incorporated $ 247 milli Book value of Centerpoint’s net assets (excluding goodwill) 221 milli Book value of Centerpoint’s net assets (including goodwill) 280 milli Exercise 11-31 (Algo) Part 1 Require 1. Determine the amount of the impairment loss reported in the 2024 income statement. Note: Enter your answer in millions (i.e., 10,000,000 should be entered as 10).d:ononon
Goodwill Impairment On January 1, 20Y3, The Simmons Group, Inc., purchased the assets of NWS Insurance Co. for $39,457,500, a price reflecting an $5,918,625 goodwill premium. On December 31, 20Y9, The Simmons Group determined that the goodwill from the NWS acquisition was impaired and had a value of only $2,219,484. a. Determine the book value of the goodwill on December 31, 20Y9, prior to making the impairment adjustment.$fill in the blank 1 b. Illustrate the effects on the accounts and financial statements of the December 31, 20Y9, adjustment for the goodwill impairment. For decreases in accounts or outflows of cash, enter your answers as negative numbers. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Balance Sheet Assets = Liabilities + Stockholders' Equity Goodwill + No effect = No effect + Retained Earnings 20Y9 Dec. 31. fill in the blank 6 fill in the blank 7 fill in the…
Hw.104. On January 3, Luna Inc. acquired all noncash assets and assumed all liabilities of Saturn Company at a cash purchase price of $960,000. Luna determined that the fair value of the assets acquired in the transaction is $1,120,000 and the fair value of liabilities is $480,000. The book value of the net assets at the purchase date was $600,000. a. Determine the amount of goodwill recorded by Luna upon purchase of Saturn Company. b. Assume that Luna is a private company that elects to amortize goodwill on a straight-line basis over 10 years. Prepare the amortization entry at December 31
A-7
A company which prepares financial statements to 31 December classifies a non-current asset as held for sale on 1 SEPTEMBER 20X2. The asset's carrying amount at that date is $20,000 and its fair value is $15,600, with estimated costs to sell of $600. The asset is sold in June 20X3 for $16,000(net of costs). Calculate any impairment losses or gains that should be recognised in the company's statement of profit or loss for the year ended 31 December 20X2 if the asset's fair value less costs to sell at 31 December 20X2 is: a)14,000 b)17,000 c)22,000 In each case, also calculate the profit or loss that should be recognised on the disposal of the asset in 20X3 and comment on the results shown.