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Unformatted text preview: component of an operating segment where discrete financial information is available A “cash generating unit (CGU)” = lowest level where goodwill is monitored by management; can’t be lower than a segment Measurement Two Steps: 1. Compare fair value to book value of reporting unit – there’s a loss if FV is less then BV 2. Impairment loss is the excess of BV over implied FV One Step: 1. Compare the recoverable amount of the CGU to book value – if recoverable amount is less, reduce goodwill first, then other assets. IFRS – Research & Development • R&D Expenses: – US GAAP requires all R&D expenses (but software development) to be expensed in the period incurred – IAS No. 38 divides this up – • Research expenses = expensed in period incurred • Development expenses = capitalized as an intangible asset (if they meet specific criteria)...
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