Some years ago, IFRS asked you to amortize goodwill, but no longer! You do NOT amortize goodwill. Instead, you need totest it for impairment annually, as the standardIAS 36 Impairment of Assetsrequires. Why is it so? Well, if an investor is willing to pay more than he gets, then he...
Explanation of goodwill; Change to the generally accepted accounting principle requirement that companies write down, or amortize, their goodwill by deducting a portion of goodwill from net income every year; Effects of goodwill write-downs on stock prices; Test from the U.S. Financial ...
Some years ago, IFRS asked you to amortize goodwill, but no longer! You do NOT amortize goodwill. Instead, you need totest it for impairment annually, as the standardIAS 36 Impairment of Assetsrequires. Why is it so? Well, if an investor is willing to pay more than he gets, then he...
Explain the two methods to amortize the bond premium and discount. Give example journal entries for the two different amortization methods. Explain the process of establishing new accounts for fixed assets that will be depreciated like equipment. Why is accumulated depreciatio...
Explain how to determine assets, liabilities, and stockholder equity. What does it mean to amortize intangible assets? How do you amortize them? What are the three major types of intangible assets, and how does the accounting for them differ?
How to distinguish between tangible assets and intangible assets? Assets: Assets are resources with economic value that are held and managed by a company, an individual, or any other entity. Assets are an important statistic to determine the firm's performance and health as well as its net wo...
Indefinite useful life:There is no foreseeable limit to period over which the asset will generate cash flows, for example brands. When you have an asset with indefinite useful life, youdo NOT amortizeit. Instead, you should revise the asset’s useful life at the end of each financial year ...
These all count as GAAP startup costs that you can record in your ledgers as startup expenses. Tax accounting requires you to amortize the costs over 180 months, without any initial deduction. If the company goes out of business, you get no write-off for any Section 197 costs that you ...
"Intangibles—Goodwill and Other (Topic 350)."The FASB re-allowed private companies to elect to amortize goodwill on a straight-line basis over 10 years. However, the election is not required. If desired, the option to amortize enables private companies to forgo the...
Amortization measures the declining value of intangible assets, such as goodwill, trademarks, patents, and copyrights. This is calculated in a similar manner to the depreciation of tangible assets, like factories and equipment. When businesses amortize intangible assets over time, they are able to ...