Question

Mikkeli OY acquired a brand name with an indefinite life in 2015 for 43, 100 markkas. At December 31, 2017, the brand name co
Complete this question by entering your answers in the tabs below. Required A Required B Prepare the entry(ies) that the U.S.
Required A Required B Prepare the entry(ies) that the U.S. parent would make on the December 31, 2017 and December 31, 2018 c
0 0
Add a comment Improve this question Transcribed image text
Answer #1
1. As per IFRS
Date Account Title Debit Credit
Dec. 31, 2017 Loss in Impairment 7,400
Brands 7,400
Compute Loss on impairment:
Carrying value of brand 43,100
Less: Fair value of brand cost to sell 35,700
Loss on impairment 7,400

Note: Carrying value of brand 43,100 exceeds both the fair value of 35,700 and discounted cash flows 34,700. therefore impairment loss is recognized.

________________________________________________________________________

2.

2. As per US-GAAP
Date Account Title Debit Credit
Dec. 31, 2017 Loss in Impairment 7,400
Brands 7,400
Compute Loss on impairment:
Carrying value of brand 43,100
Less: Fair value of brand cost to sell 35,700
Loss on impairment 7,400

Note: In this case, the indefinite life of intangible assets other than goodwill will be tested for impairment loss annually by comparing the fair value with the carrying amount.

Add a comment
Know the answer?
Add Answer to:
Mikkeli OY acquired a brand name with an indefinite life in 2015 for 43, 100 markkas....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Mikkeli OY acquired a brand name with an indefinite life in 2015 for 43,800 markkas. At...

    Mikkeli OY acquired a brand name with an indefinite life in 2015 for 43,800 markkas. At December 31, 2017, the brand name could be sold for 37,200 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 46,000 markkas, and the present value of this amount is 36,200 markkas. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP...

  • Mikkeli OY acquired a brand name with an indefinite life in 2015 for 44,000 markkas. At...

    Mikkeli OY acquired a brand name with an indefinite life in 2015 for 44,000 markkas. At December 31, 2017, the brand name could be sold for 35,300 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 46,200 markkas, and the present value of this amount is 34,300 markkas. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP...

  • Problem 11-22 (LO 11-9) Mikkeli OY acquired a brand name with an indefinite life in 2015...

    Problem 11-22 (LO 11-9) Mikkeli OY acquired a brand name with an indefinite life in 2015 for 45,400 markkas. At December 31, 2017, the brand name could be sold for 36,100 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 47,600 markkas, and the present value of this amount is 35,100 markkas. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be...

  • Rawl Corporation sold a building to a bank at the beginning of 2017 at a gain...

    Rawl Corporation sold a building to a bank at the beginning of 2017 at a gain of $82,000 and immediately leased the building back for a period of four years. The lease is accounted for as an operating lease. The book value of building (net) is $525,000. Assume that a U.S.-based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore...

  • CH11Question5 Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The...

    CH11Question5 Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The equipment was expected to have a useful life of four years and a residual value of $11,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $67,100, a salvage value of $11,000, and a remaining useful life of three years. In measuring property, plant, and equipment subsequent to acquisition...

  • Izmir A.S.issued convertible bonds at their face value of 134,000 lira on December 31, 2017. The...

    Izmir A.S.issued convertible bonds at their face value of 134,000 lira on December 31, 2017. The bonds have a 10-year life with interest of 11 percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was 13 percent. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required:...

  • Sorocaba Ltda, sold a building to Banco Janeiro on January 1, 2017, for 221,000 reais and...

    Sorocaba Ltda, sold a building to Banco Janeiro on January 1, 2017, for 221,000 reais and then leased it back under a 10-year lease agreement, which is accounted for as an operating lease. The building had a carrying amount of 174,300 reais and a fair value of 221,000 reais on the date of sale. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare...

  • Rawl Corporation sold a building to a bank at the beginning of 2017 at a gain...

    Rawl Corporation sold a building to a bank at the beginning of 2017 at a gain of $82,000 and immediately leased the building back for a period of four years. The lease is accounted for as an operating lease. The book value of building (net) is $525,000. Assume that a U.S.-based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore...

  • Pamell Company acquired construction equipment on January 1, 2017, at a cost of $79,200. The equipment was expect...

    Pamell Company acquired construction equipment on January 1, 2017, at a cost of $79,200. The equipment was expected to have a useful life of five years and a residual value of $13,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $75,700, a salvage value of $13,000, and a remaining useful life of four years. In measuring property, plant, and equipment subsequent to acquisition under...

  • Izmir AS issued convertible bonds at their face value of 102,000 lira on December 31, 2017. The bonds have a 12-ye...

    Izmir AS issued convertible bonds at their face value of 102,000 lira on December 31, 2017. The bonds have a 12-year life with interest of 9 percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was 11 percent Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT