2 How often should impairment tests of goodwill be conducted

2. How often should impairment tests of goodwill be conducted? 3. Identified intangibles can be aggregated into permits, intellectual property, technology tools, procurement rights, competitor arrangements and customer arrangements. 1) Name three types of permits: 2) Name three types of procurement rights: 4. What type of intangible assets is not subject to amortization? Accountants’ Handbook Chapter 24: 5. Name two of the several factors that are influencing the trend toward fair value accounting. 6. What is the main reason that globalization has accelerated since the 1980s? 7. According to the FASB’s Master Glossary, what is the definition of fair value? 8. Also, in accordance to the Glossary; market participants are buyers and sellers in the principal market for the asset or liability that have four characteristics. What are two of those four characteristics? Accountants’ Handbook Chapter 25: 9. Fair values are estimates, and are frequently used in assessing the realizable value of assets and liabilities and indicating whether an allowance or write-down of the asset or liability might be required. 1) What is management’s responsibility? 2) What is the auditor’s responsibility? ACCT310 Week Seven Homework Concluded: Page 2 of 2 10. The income approach is a general way of determining a value indication of a business, business ownership interest, security, or intangible asset using one or more methods that convert anticipated economic benefits into a present single amount. What are the two required fundamental steps for the income approach? 11. What is another term used interchangeably with “discount rate?” 12. Analysts often employ survivor curves to assist in determining the remaining useful life of an asset. What are the names of the X and Y axis of the survivor curve? END OF WEEK SEVEN HOMEWORK

Solution

Hey Dear Student !!

We are suppose to Answer only first 4 sub parts in case of Multiple Questions you have to post your question in 4-4 sub parts.

Answer for the 2-5th questions are as follows:-

2)

Impairment of Goodwill is to be checked on Annual Basis as per IAS 36 Impairment of Assets.

3)

i) Types of Permits:
Pollution Control Permit
Electrical Permit
Food Permit
Building Permit

ii) Types of Procurement rights:
Raw Material Procurement Right
Capital Goods & Service Procurement Right
Maintenance, Repair & Operating Supplies Procurement Right

4)

As per IAS 36 assets having indefinite useful life are not subject to any amortisation but as per IAS 36 these assets are subject to impairment of assets every year end.

5)

Following are the factors influencing the trend towards Fair Value:-

i) Fair Value Accounting shows the true & fair view of Financial Statements which is a main objective of financial statement of any entity.

ii) Investors will get the right position of Company that what is the present realisable value in the market of assets of the company.

iii) It will show the true value of Financial Instruments they will not remains stagnant in Fair Value Accounting Method.

Pleasure Teaching You !!