determined that the prior year step 1 analysis of Big Time could be used based on the fact that assets and liabilities had not significantly changed‚ the most recent fair value determination had exceeded the carrying value amount by substantial margins‚ and that no events or circumstances would cause the fair value to go below the book value. The issues at hand are whether or not an interim impairment analysis should have been performed as opposed to carrying forward the prior year step 1 analysis. Management
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down after the assets are tested for impairments and how the impairment loss will be allocated among group of assets. The audit memo gives the answer about whether long-lived asset or goodwill write-downs due to impartment or write-ups if the fair value subsequently increases. Fact: To take advantage of the alternative fuel source expertise‚ First Motors purchased Macinaw Motors Corporation which has significantly specialized in hydrogen-powered cars. Although First Motors and Macinaw merged together
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great challenges in communicating the relevant value for an organisation. However‚ they are becoming increasingly more important in an environment where goodwill and other intangible assets are making up larger components of business purchase/combination prices. In determining the correct value of goodwill in the financial statements‚ there are three bases of measurement in accounting that can be applied; historical cost‚ market value and net present value. Each method has its own costs and benefits
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start-up firm‚ to acquire financing without diluting its equity value and raising debt in the market. Management believes that the firm is more valuable than venture capital firms would believe‚ and debt financing would be extremely costly since RhoMed doesn’t currently have positive cash flow. For Aberlyn‚ the main benefits of the transaction are the interest payments paid on the lease and potential to sell the patent for a much higher value than the original $1 Million valuation by RhoMed. However‚
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ACC422 Week 4 E11-4 P11-6 E12-16 P12-1 Intermediate Acc. 13e E11-4 (Depreciation Computations—Five Methods) Wenner Furnace Corp. purchased machinery for $279‚000 on May 1‚ 2010. It is estimated that it will have a useful life of 10 years‚ salvage value of $15‚000‚ production of 240‚000 units‚ and working hours of 25‚000. During 2011 Wenner Corp. uses the machinery for 2‚650 hours‚ and the machinery produces 25‚500 units. Instructions From the information given‚ compute the depreciation charge
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Galaxy Sports Inc. is a publicly traded company based in the U.S‚ which manufactures sports equipment. Considering it is a public company‚ Galaxy is bound by the rules and regulations of the SEC in regards to its accounting and reporting standards. The SEC’s tight supervision of companies is important because the performance of a public company not only affects its owners and employees‚ but its shareholders‚ institutional investors‚ and other stakeholders as well. For this reason‚ companies are required
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culture‚ many Americans have found themselves resorting to debt consolidation. But what is debt consolidation? It is basically the process of securing one loan in for the purpose of paying off another loan. This is done by many people so that they can gather all their loans and credit line so that they can consolidate them into one single loan. This is often a viable option if you have many loans that becomes unmanageable. Debt consolidation provides the borrower the convenience of remembering and servicing
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INTRODUCTION Realised-profit‚ matching-based‚ historical cost accruals accounting (HCA) has for over fifty years been repeatedly challenged as being an inadequate basis for the measurement of "income" which reports increments in the value of businesses. Such challenges continue unabated and are made by both accounting standards regulators and by academic commentators. Despite its obvious deficiencies for measuring valuation based income‚ and subject to concept of prudence‚ internationally HCA remains
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Bibliography: 1. Google search engine 2. Icsi module of acconting 3. Wikipedia 4. M.com part-I book on Advanced financial accounting .
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$150/$160 million Acceptable: Justification of Method Market Valuation: Revenue (Sales) Multiples Revenue multiples is preferred because it is less affected by accounting choices. The approach measures the market value of the operating assets of IPD in relation to market value of operating assets of comparable companies. IPD is not fully integrated with the rested of the company hence we use basic industry comparables multiples. We assume that the multiples ratios of comparable companies
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