Essay about acct540 week#5

Goodwill is considered impaired when the implied fair value of goodwill in a reporting unit of a company is less than its carrying amount, or book value, including any deferred income taxes. By qualitative factors, if the fair value is less than its book value (likelihood more than 50%), two step of the goodwill impairment test is necessary. According to ASC 350-20-35-2 and 3(A&B&D), if the company determines that it is not more likely than not that fair value is less than the book value, it does

vi) Goodwill- The beginning balance for Goodwill was determined by finding the difference between Total Assets and Total Liabilities at the beginning . Goodwill accounts for all the intangible assets that were transferred from the old company to the new company, including brand name, as well as a premium paid for the company. Goodwill was not amortized in this model.

Goodwill is not amortised. Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.For the purposes of impairment testing, goodwill is allocated to each of the Group 's cash-generating units (CGUs), or groups of CGUs, expected to benefit from the synergies of the business combination. CGUs (or groups of CGUs) to which goodwill has been allocated are tested for impairment annually, or more frequently if events or changes in circumstances indicate that goodwill might be impaired.If the recoverable amount of the CGU (or groups of CGUs) is less than the carrying amount of the CGU (or groups of CGUs), the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU (or groups

Sony Corporation is a Japanese owned company, created in 1946 based in Tokyo, Japan. The company competes in the technology market with diversity. This includes video games, computers and computer hardware, television, media players, etc. With that being said, Sony has had their ups and downs over the past few years, just like everyone else in this industry. Things such as the U.S. economy can really affect the future of this company. Now that the economy is on the downfall, things such as entertainment are not as important as paying for food, gas, and other bills. It is important to realize these things as you analyze the company due to the fact that the company

Thomas Foods is a third party entity that will best benefit working off of a Purchase Order over trying to change their accounting procedures entirely. With a

First, on the basis of assumptions underlying the acceleration of the Company’s strategy refocus, management projects a decline in the net cash flows for the A2 Americas segment. As a result, in the third quarter of 2010, management has tested the long-lived assets of this segment for recoverability. They recorded a pretax impairment charge of $1.76 billion in cost of sales.

As discussed above, if indicators of impairment exist for an asset (group) to be held and used, an entity determines whether the sum of the estimated undiscounted future cash flows attributable to the asset (group) in question is less than its carrying amount. If those undiscounted cash flows are less than

Goodwill Impairment is the Goodwill that has become or is considered to be of lower value than at the time or purchase. From an accounting perspective, when the carrying value of the goodwill exceeds the fair value, then it is considered to be impaired. Negative publicity about a firm can create goodwill impairment, as can the reduction of brand-name recognition. Since the Financial Accounting Standards Board (FASB) first introduced its standards update on testing for goodwill impairment (ASU 2011-08), entities with goodwill on their balance sheet have had the option when testing goodwill for impairment to first assess qualitative factors as a basis for determining whether it is necessary to perform the traditional two-step approach described in ASC Topic 350. The optional qualitative assessment is commonly referred to as “step zero.”

Sony is one of the largest consumer electronics manufacturers in the world. It has introduced various high quality products such as the Play Station series product line. However, Sony has not managed to have a positive net income and has faced six net loss in the last seven years. Aiming for a turning a round, Sony declares a goal of $4.8 million of operating profit in the fiscal year 2017 and targets a 10% return on equity (the Economist, 2015). Sony’s business strategy to is to restructure and divide the company into three sectors, which are Growth Drivers, Stable Profit Generators, and Volatility Management, to give the business sectors the independence to operate in the most efficient manner (Baker, 2015).

(2) 350-20-35-1   Goodwill shall not be amortized. Instead, goodwill shall be tested for impairment at a level of reporting referred to as a reporting unit. (Paragraphs 350-20-35-33 through 35-46 provide guidance on determining reporting units.)

4. ASC 360-10-35-23 provides that “[f]or purposes of recognition and measurement of an impairment loss, a long-lived asset or assets shall be grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities…”

of the asset (asset group) at the date it is tested for recoverability, whether in use (see paragraph 360-

The authoritative guidance for asset impairment is to ensure that impairment is recorded and dealt with as depreciation. The scope of the standard is writing off of assets and depreciation. According to the guidance of 360-10-35, it address how long-lived assets that are intended to be held and used in an entity’s business shall be reviewed for impairment. The impairment loss can only be recognized if the carrying amount of a long-lived assets is not recoverable and

Intangible assets are one of the most significant items in Myers financial statement. It consists of goodwill, brand names and trademarks, software and leases. AASB 136 Impairment of Assets requires Goodwill and some of the brand names that are indefinite useful life to test for the impairment. In Myer, there is no impairment loss. Furthermore, the accumulated amortisations of the other intangible assets are shown in the table X have a total value of $73585 thousand. According to AASB 117 Leases, the total rentals leases over the leases term are being expensed on a straight-line basis. In contrast, Myer’s competitor David Jones has only two intangible assets goodwill and software. The accumulated amortisation for software is $28808 thousand which is shown in the table X and it is the total value of accumulated amortisation.

Based on SFAS No.142 states goodwill and intangible assets that have indefinite useful life will not be