IAS 38 Intangible Assets outlines the accounting requirements for intangible assets‚ which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). Intangible assets meeting the relevant recognition criteria are initially measured at cost‚ subsequently measured at cost or using the revaluation model‚ and amortised on a systematic basis over their useful lives (unless the asset has an indefinite useful
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3 Scope of IAS 36 IAS 36 applies to (among other assets): – Tangible assets • Land and buildings • Machinery and equipment • Ships‚ aircrafts‚ motor vehicles • Investment property carried at cost (see IAS 40) – Intangible assets • Goodwill • Computer software • Patent‚ brand‚ customer list • Development costs 4 Definitions Impairment : – An asset is impaired when its carrying amount exceeds its recoverable amount Carrying amount : – The amount at which an asset is recognised
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Purchase Method of Accounting All business combinations must be accounted for by applying the purchase method. This involves 3 key steps: a) Identifying an acquirer‚ b) Measuring the cost of the business combinations and c) Allocating the cost of the business combination to the identifiable assets and liabilities acquired. a) Identifying the Acquirer The acquirer should be identified for all business combinations‚ The acquirer is the entity which obtains controls over the other entity‚ There
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WEEK 5 / ASSIGNMENT 1 Case Analysis: Nantucket Nectars PRO’s & CON’s Tom Scott and Tom First founded Nantucket Nectars in 1990 as a small side-business on Nantucket’s Straight Wharf. A peach fruit juice drink that Tom First discovered while visiting Spain inspired him and his partner to embark upon the journey of building their juice company. After only six years‚ the two entrepreneurs built a business that was generating $29‚493‚000 per year in revenue and $969‚000 in EBITDA. With remarkable
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Property‚ Plant and Equiptment * The property‚ plant and equipment portion of the Consolidated Balance Sheet of Sterling Homex shows a significant increase from 1970 to 1971. The Major contributor to its drastic increase is the “Buildings” account. From 1‚702‚924.00 it increased to 4‚822‚055.00‚ the movement was not explained in the notes though it may be attributed to the expansion of Homex in 1971. This is the time wherein they doubled their manufacturing facilities and created the U.S. Shelter
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goodwill. implied offering price. takeover premium. 5. If the value implied by the purchase price of an acquired company exceeds the fair values of identifiable net assets‚ the excess should be allocated to reduce any previously recorded goodwill and classify any remainder as an ordinary gain. allocated to reduce current and long-lived assets. allocated to reduce long-lived assets. accounted for as goodwill.
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Amortization of fair value over cost reduces the investment account 3. After allocating cost in excess of book value‚ which asset or liability would not be amortized over a useful life? A. Cost of goods sold B. Property‚ plant‚ & equipment C. Patents D. Goodwill E. Bonds payable 4. A company should always use the equity method to account for an investment if A. it has the ability to exercise significant influence over the operating policies of the investee. B. it owns 30% of another company’s stock. C
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The Impact of Assets Impairment on Company Accounts Assignment 1 ACCT 20054 – Company Accounting Term 2‚ 2012 Prepared & Submitted by Jobish Mathew S0214315 Tutor: Davood Alizadeh Due date: 24th August 2012 Submitted date: 24th August 2012 Executive Summary The study ‘The Impact of Assets Impairment on Company Accounts’ presents the cotemporary issues facing by major five Australian companies Qantas‚ Ten Networks‚ Billabong‚ Bluescope steel and Harvey Norman. This research
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prepaid accounts fall under this. Rule- Dr. the receiver Cr. the giver 2. Real Accounts- All assets‚ tangible & intangible come under this. Tangible assets like land & building‚ plant & machinery‚ furniture etc. and Intangible assets like goodwill‚ patents‚ trademarks etc. Rule- Dr. what comes in Cr. what goes out 3. Nominal Accounts- All expenses‚ losses‚ incomes and gains come under this. Rent‚ wages‚ salaries‚ interest‚ bad debts etc. are some examples. Rule- Dr. all expenses
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Sales Returns and Allowances $30‚000. BE9-13 Information related to plant assets‚ natural resources‚ and intangibles at the end of 2011 for Spain Company is as follows: buildings $1‚100‚000; accumulated depreciation—buildings $650‚000; goodwill $410‚000; coal mine $500‚000; accumulated depletion—coal mine $108‚000. Prepare a partial balance sheet of Spain Company for these items. Exercise Do It! 9 Match the statement with the term most directly associated with it E9-9
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