1. Does it make sense to want to use fair value for assets and liabilities? For...
1. Does it make sense to want to use fair value for assets and liabilities? For example, just how easy is to get fair values on an annual (or regular) basis and just accurate are fair values (aren't they subjective)?
Homework Answers
When company is under liquidation then company must use fair
value method to reflect it's position
From Invester view point, fair value helps when company has land or
building in its assets and are shown at historical cost. Fair vale
helps investor to understand real value of the land or
building.
Fair value of asset is often difficult to get on regular basis.
however one can take help form actuary to asses the fair value of
property
Add Answer to:
1. Does it make sense to want to use fair value for
assets and liabilities? For...
Fair values are really for investors and analysts, aren't they? So why would the corporation want...
Fair values are really for investors and analysts, aren't they? So why would the corporation want to know and pay for the fair value of their assets and liabilities? What would investors, analysts or the corporation do with that information? (Please provide adequate context to the response.)
Do you think it would make more sense in terms of depreciation of assets for us...
Do you think it would make more sense in terms of depreciation of assets for us to follow IFRS, and use fair market value instead of predetermined depreciation amounts? Would fair market value be a better way of recording depreciation?
Fair Value Measurements The fair values of our financial assets and liabilities as of December 26,...
Fair Value Measurements The fair values of our financial assets and liabilities as of December 26, 2015 and December 27, 2014 are categorized as follows: 2015 2014 Assets(a) Liabilities(a) Assets(a) Liabilities(a) Available-for-sale securities: Equity securities (b) $ 127 $ - $ 124 $ Debt securities (c) 7,231 - 3,167 $ 7,358 $ - $ 3,291 $ Short-term investments (d) $ 193 $ - $ 197 $ - Prepaid forward contracts (e) $ 27 $ - $ 26 $ Deferred compensation...
On January 1, total assets and liabilities had a fair market value of $30,000 and $12,000,...
On January 1, total assets and liabilities had a fair market value of $30,000 and $12,000, respectively. On December 31, total assets and liabilities were $28,000 and $20,000, respectively. During the year, $7,000 of dividends were declared and paid and no stock was purchased or issued. Calculate the amount of net income or loss for the year.
X Company acquires all of Y Company's assets and liabilities for $15,000,000 in cash. The fair...
X Company acquires all of Y Company's assets and liabilities for $15,000,000 in cash. The fair values of Y's assets and liabilities approximate their book values, except Y has developed technology valued at $8,000,000 that is not reported on its balance sheet, and its buildings are overvalued by $7,000,000. Here is Y's balance sheet just prior to the acquisition: Y Company Current assets $ 500,000 Land, buildings, and equipment 9,500,000 Total assets $10,000,000 Liabilities $ 6,000,000 Common stock, $1 par...
How do the three basic accounting criteria help "accounting make sense?" 3 Basic Accounting Criteria: 1....
How do the three basic accounting criteria help "accounting make sense?" 3 Basic Accounting Criteria: 1. Accounting information should be relevant. Accounting reports should provide information that describes as accurately and completely as possible the status of assets, liabilities, and owners' equity, the results of operations, and cash flows. 2. Accounting information should be objective. The amounts reported should not be biased, particularly by the subjective judgments of management. (The FASB uses the term reliable in the same way we...
1) The traditional accounting model delays the recognition of value changes of assets and liabilities until...
1) The traditional accounting model delays the recognition of value changes of assets and liabilities until what event occurs? a. A change in value. b. A market transaction. c. A balance sheet date. d. Cash is received or cash is paid. 2)Which of the following is not one of methods used by GAAP for treating value changes? a. Recognize value changes on the balance sheet and income statement when they are realized in a market transaction b. Recognize value changes...
Assume the fair value option for financial assets and liabilities is not elected. Which of the...
Assume the fair value option for financial assets and liabilities is not elected. Which of the following would not be an item classified separately under other comprehensive income? 1) Foreign currency items 2) Adjustments to record funded status of pension plans 3) Unrealized gains (losses) on available‐for‐sale debt securities 4) Gains (losses) on sale of treasury stock
This week we discuss the properly classified Balance Sheet. Recall that the value of assets is based on historical cost with few exceptions (short-term investments). Liabilities include values based o...
This week we discuss the properly classified Balance Sheet. Recall that the value of assets is based on historical cost with few exceptions (short-term investments). Liabilities include values based on terms like "likelihood" and "estimatable". So how reliable is the Balance Sheet? Please read this weeks lesson and respond to these questions, in your own words. Do you feel that the balance sheet would be more accurate if accountants were allowed to use fair value when placing asset values on...
23. On January 1, 2016, Milwaukee Company purchased Mi $1,200,000 cash. The fair value of Minneapolis's assets was $1,080,000, and it had liabilities of $100,000. The book value of the compa...
23. On January 1, 2016, Milwaukee Company purchased Mi $1,200,000 cash. The fair value of Minneapolis's assets was $1,080,000, and it had liabilities of $100,000. The book value of the company's assets was $980,000. Required: a) Prepare Milwaukee's journal entry to record the acquisition of Minneapolis Company b) At the end of 2018, Milwaukee concluded that the value of its goodwill (associated with the Minneapolis C l ompany acquisition of Minneapolis) had declined by $30,000. Prepare the journal entry to...
Fair Value Measurements The fair values of our financial assets and liabilities as of December 26, 2015 and December 27, 2014 are categorized as follows: 2015 2014 Assets(a) Liabilities(a) Assets(a) Liabilities(a) Available-for-sale securities: Equity securities (b) $ 127 $ - $ 124 $ Debt securities (c) 7,231 - 3,167 $ 7,358 $ - $ 3,291 $ Short-term investments (d) $ 193 $ - $ 197 $ - Prepaid forward contracts (e) $ 27 $ - $ 26 $ Deferred compensation...
23. On January 1, 2016, Milwaukee Company purchased Mi $1,200,000 cash. The fair value of Minneapolis's assets was $1,080,000, and it had liabilities of $100,000. The book value of the company's assets was $980,000. Required: a) Prepare Milwaukee's journal entry to record the acquisition of Minneapolis Company b) At the end of 2018, Milwaukee concluded that the value of its goodwill (associated with the Minneapolis C l ompany acquisition of Minneapolis) had declined by $30,000. Prepare the journal entry to...
Most questions answered within 3 hours.
-
While rotating the tires on your car you notice a rock [mass =
0.1 Kg] stuck...
asked 43 minutes ago -
Using MARS simulator, write MIPS programs according to
the following scenarios: Receive a positive integer number...
asked 2 hours ago -
An object in front of a concave mirror has a real image that is
11.5 cm...
asked 2 hours ago -
Consider the reaction, C3 H8 + O2 --> CO2 + H2O. How many
moles of O2...
asked 4 hours ago -
You and your opponent both roll a fair die. If you both roll the
same number,...
asked 4 hours ago -
In a study of the accuracy of fast food drive-through orders,
Restaurant A had 257 accurate...
asked 4 hours ago -
Identify and describe in detail the four categories of
institutions that could be included in a...
asked 4 hours ago -
In python
class Customer:
def __init__(self, customer_id, last_name, first_name, phone_number, address):
self._customer_id = int(customer_id)
self._last_name =...
asked 5 hours ago -
What is an example of a limitation in implementing a new
ERP system and how it...
asked 4 hours ago -
In a section of 9.7cm of an artery with a radius of 2.6mm there
is a...
asked 4 hours ago -
the two carboxylic acid groups of aspartic acid have different
acidities with pKa values of 2.1...
asked 5 hours ago -
Would CuCO3 aqueous salt combined with calcium chloride
form a solid precipitate? If so, what would...
asked 5 hours ago