Ratio which could address about the stakeholders concern about defficiency of asset and cashflow
1. Return on Asset which will calculate the return earned or generated using the asset of the company and it is good measures to address the concern
2. Current ratio in which calculate the times of cuurent asset can cover up the current liability
3. earning per share under this ratio it is calculate the earning attributable for each share's
calculation of impairment and entries under IFRS
recoverable amount is higher of "value in use" and "fair value less cost to sell"
3300000 - value in use and 3200000-75000=3125000 - fairvalue less cost to sell
recoverable amount = 3300000
carrying amount = 3600000
impairment loss = 300000
so the impairment will charge on the goodwill first and if the goodwill remaining then it tis charge to other assets on pro-rata basis
goodwill = 1350000-300000=1050000
journal entries
DR impairment loss $300000
CR goodwill $300000
under ASPE
impairment loss = carrying value - fairvalue = 3600000 - 3200000 =400000
goodwill = 1350000 - 400000 = 950000
entries
Dr impairment loss $400000
Cr Goodwill $400000
Q4. (25 marks) Imagine you are planning to raise capital for the firm, you are wary...
Header Q1. (25 marks) Calculation of and journal entries for impairment of goodwill Gandach Corporation purchased a division five years ago for $ 3 million. The division has been identified as a reporting unit that is cash-generating under IFRS. Management is reviewing the division for impairment of goodwill and has estimated the fair value of the reporting unit to be $ 3.2 million and the unit's value in use to be $ 3.3 million. In addition, there would be $...
Header Q1. (25 marks) Calculation of and journal entries for impairment of goodwill Gandaph Corporation purchased a division five years ago for $ 3 million. The division has been identified as a reporting unit that is cash-generating under IFRS. Management is reviewing the division for impairment of goodwill and has estimated the fair value of the reporting unit to be $ 3.2 million and the unit's value in use to be $ 3.3 million. In addition, there would be $...
Q1. (25 marks) Calculation of and journal entries for impairment of goodwill Gandaph Corporation purchased a division five years ago for $ 3 million. The division has been identified as a reporting unit that is cash-generating under IFRS. Management is reviewing the division for impairment of goodwill and has estimated the fair value of the reporting unit to be $ 3.2 million and the unit's value in use to be $ 3.3 million. In addition, there would be $ 75,000...
Calculation of and journal entries for impairment of goodwill Gandaph Corporation purchased a division five years ago for $ 3 million. The division has been identified as a reporting unit that is cash-generating under IFRS. Management is reviewing the division for impairment of goodwill and has estimated the fair value of the reporting unit to be $ 3.2 million and the unit’s value in use to be $ 3.3 million. In addition, there would be $ 75,000 in direct costs...
Q4. (25 marks) Imagine you are planning to raise capital for the firm, you are wary about shareholders, which accounting ratios could address the concerns of those stakeholders regarding efficiency of the assets and cashflow? Explain in detail.
Q4. (25 marks) Imagine you are planning to raise capital for the firm, you are wary about the lender and shareholders, which accounting ratios could address the concerns of those stakeholders? Explain in detail.
Riverbeds Construction & Paving expanded its business by purchasing Alcott Maintenance, a division that provides road maintenance services. The division was purchased three years ago for $3,286,000 and has been identified as a reporting unit. The net assets for the division including goodwill are as follows: Cash $234,000 Accounts Receivables 278,000 Inventory 782,000 Property, Plant & Equipment 1,037,000 Goodwill 1,330,000 Accounts Payable (137,000 ) Unearned Revenue (77,000 ) Net assets, at carrying amounts $3,447,000 The fair value of the Alcott...
Imagine you are planning to raise capital for the firm, you are wary about shareholders, which accounting ratios could address the concerns of those stakeholders regarding efficiency of the assets and cashflow? Explain in detail.
6 H Q4. (25 marks) Imagine you are planning to raise capital for the firm, you are wary about the lender and shareholders, which accounting ratios could address the concerns of those stakeholders? Explain in detail 1
Concord Corporation purchased Skysong Company 3 years ago and at that time recorded goodwill of $460,000. The Skysong Division's net assets, including the goodwill, have a carrying amount of $920,000. The fair value of the division is estimated to be $1,130,000. Prepare Concords' journal entry, if necessary, to record impairment of the goodwill. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and...