Explain how a company determines if goodwill is impaired.Goodwill:An amount paid by a company while purchasing another company in excess of the asset's fair value is called the goodwill amount. The amount of goodwill is calculated by subtracting the tot...
Write an essay describing bad debt expense and how it is recorded when using the direct write-off method. How is it recorded when using the allowance method? What is goodwill? How do publicly traded companies account for its value over time? Consider the matching p...
A plant asset is usually recorded on the business's ledger at the book value, which is the amount the company paid for that asset. The asset is usually depreciated over its life and the ledger will also show depreciation adding up in a contra asset account "accumulated depreciati...
The IRS definition of organization costs is another area that gets complex. Some costs, such as the expense of issuing corporate stock, count as syndication costs for tax purposes, not organization costs. Syndication costs don't get any immediate deduction: You have to depreciate them. ...
Only 3/4 of the incorporation costs qualify for depreciation per Schedule 10, and the depreciation rate is 7% per year. Finally, you should also complete the T2 Return, Schedule 1 for calculating Net Income for Tax Purposes, and Schedule 50 to report shareholders’ information. Thanks, Allan ...
Describe what a "suspended loss" is, how it is generated and when it is becomes deductible.Question:Describe what a "suspended loss" is, how it is generated and when it is becomes deductible.Loss Limitation Rules:The income tax legislation in the United States inc...
In 2001, theFinancial Accounting Standards Board (FASB)declared in Statement 142–Accounting for Goodwill andIntangible Assets–that goodwill was no longer permitted to beamortized. In accounting, goodwill is accrued when an entity pays more for an asset than its fair value, based on the company...
Goodwill is an intangible asset that's created when one company acquires another company for a price greater than its net asset value. It's shown on the company'sbalance sheetlike other assets. But goodwill isn't amortized or depreciated, unlike other assets that have a discernible useful li...
for tax purposes, intangible assets are generally amortized over their useful life or a statutory period defined by the IRS, usually 15 years for most intangibles. Amortization allows businesses to deduct the cost of these assets over time, similar to depreciation for tangible assets, thereby reduci...
unlike some other assets, goodwill is intangible. It is not a physical asset like buildings or machinery. Another difference is that it has an indefinite life (as long as the company operates). Other assets have a definite useful life