us_11_8c_billys_beats_0804111

us_11_8c_billys_beats_0804111 - Case 11-8 Billys Beats Inc....

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Copyright 2009 Deloitte Development LLC All Rights Reserved. Case 11-8 Billy’s Beats Inc. Billy’s Beats Inc. (Billy’s), an SEC registrant, is a new audit client with a fiscal year-end of December 31, 2010. Billy’s manufactures musical instruments. Billy’s acquired Little Drummer Boy Inc. (Little Drummer) in 2010 for $575 million in cash. Significant assets acquired included property, plant, and equipment totaling $865 million and other assets totaling $145 million. The useful lives assigned to the property, plant, and equipment acquired were 30 years for the plant and 15 years for the equipment. The useful lives for the plant and equipment already owned by Billy’s are 20 years and 10 years, respectively. Acquired customer lists, included in other assets, were assigned a useful life of 15 years. To test the useful lives of the operating assets, the engagement team asked management why the number of years assigned to the plant and equipment acquired differed from the years assigned to that which Billy’s had already owned. Management stated that the
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This note was uploaded on 03/06/2012 for the course GEO 505 taught by Professor Johnschmidt during the Spring '12 term at CUNY Graduate School of Journalism.

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us_11_8c_billys_beats_0804111 - Case 11-8 Billys Beats Inc....

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