FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- What are 2 specific criteria essential to determine whether to recognize an intangible asset in a business combination?
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What are some reasons that a business combination take place?
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Goodwill is often acquired as part of a business combination. Why, when separate incorporation is maintained, then goodwill does not appear on parent’s companytrial balance as a separate account?
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Step 1: Introduction
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Intangible asset:
An intangible asset is a non-physical asset with no intrinsic physical form but represents a valuable resource for a business or entity. Intangible assets are long-term assets that can contribute to the future revenue generation and value of a company. These assets lack a physical presence and are typically not financial instruments.
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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
- Which consolidation method should be used in preparing consolidated financial statements in accordance with IFRS? A. Proportionate consolidation method.B. Either identifiable net assets or fair value enterprise method.C. New entity method.D. Parent company method.arrow_forward25. A parent company’s investment account would include an element which is representative of : Multiple Choice the unrecorded difference between fair value and book value of the investee’s assets. the unrecorded book value of the investor’s assets. the goodwill accrued since the purchase of the investee. the recorded current value of the investee’s assets.arrow_forwardHow can the separate entity concept benefit the owner and the businessarrow_forward
- 16.Explain the process of accounting for mergers and acquisitions. How are the assets and liabilities of the acquired company recorded on the balance sheet of the acquiring company? Discuss the treatment of goodwill and any adjustments that might be necessary post-acquisition. Provide an example of a hypothetical merger and the journal entries that would be recorded.arrow_forwardIf an intangible asset is acquired as a part of the business combination it's recognised at: a. Fair value b. Cost c. Carring amount d. None of the given optionsarrow_forwardwhat are intra-entity transfers? How do you treat intra-entity transfers while consolidating the financial statements of a parent company and its subsidiary?. Discuss with suitable examples.arrow_forward
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