Assignment 6 - Assignment 6 BBUS 3201 Emma OGrady Q 1...

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Assignment 6 BBUS 3201 Emma O’Grady June 23, 2016 Q 1: Exercise 12 – 3 A) Purchased Trademarks: $34,000 Excess of cost over fair-value of identifiable net assets of acquired subsidiary: $81,000 Development phase activity: $29,000 Payment for a favourable lease: $15,000 Total added to Statement of Financial Position = $159,000 B) Organization Costs = expense Discount on Bonds Payable = expense Deposits with advertising agency for ads to promote Goodwill of company = expense Cost of equipment acquired for research and development projects = fixed asset Cost of researching a secret formula for a product = expense Q 2: Exercise 12 - 21 A) Carrying Amount $390,000,000 Fair Value $346,000,000 Loss on Impairment = $44,000,000 Loss on Impairment Accumulated Impairment Losses $44,000,000 $44,000,000
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B) Under ASPE, Impairment losses recognized in the past cannot be reversed. C) Recoverable amount = Higher of: 1) Value in Use = $385,000,000 2) Fair Value – costs = $341,000,000 $390,000,000 (carrying amount) > $385,000,000 (recoverable amount) Loss on Impairment = $390,000,000 – 385,000,000 = $5,000,000 Loss on Impairment Accumulated Impairment Losses $5,000,000 $5,000,000 D) Recoverable Amount = Higher of: 1)
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