American Company acquired all of the assets and liabilities of Braziian Company. Brazialian Company has research...
American Company acquired all of the assets and liabilities of Braziian Company. Brazialian Company has research and development projects in process, which have not yet been completed. How does American Company report Brazialian’s in-process research and development?
| A. |
As an indefinite life intangible asset, at fair value |
|
| B. |
As a limited life intangible asset, at fair value |
|
| C. |
As part of goodwill |
|
| D. |
It is not reported |
Homework Answers
A) as an indefinate life intangible asset , at fair value.
Note - Financial accounting standard board requires that an acquirer of a business record, seperately from goodwill, the identifiable assets and liabilities assumed of the acquisition date fair value.
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American Company acquired all of the assets and liabilities of
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Sunland Company, organized in 2019, has set up a single account
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1/2/20
Purchased patent (7-year life)
$305,900
4/1/20
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347,000
7/1/20
Purchased franchise with 10-year life; expiration date
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427,000
8/1/20
Payment of copyright (5-year life)
152,400
9/1/20
Research and development costs
217,000
$1,449,300
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current assets of the acquired firm. 5. What is the appropriate accounting treatment for the value assigned to in process research and devel- opment acquired in a business combination? a. Expense upon acquisition. b. Capitalize as an asset. C Expense if there is no alternative use for the assets used in the research and development and technological feasibility has yet to be reached. d. Expense until future economic benefits become certain and then capitalize as an asset...
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Sunland Company, organized in 2019, has set up a single account
for all intangible assets. The following summary discloses the
debit entries that have been recorded during 2020.
1/2/20
Purchased patent (7-year life)
$305,900
4/1/20
Purchase goodwill (indefinite life)
347,000
7/1/20
Purchased franchise with 10-year life; expiration date
7/1/30
427,000
8/1/20
Payment of copyright (5-year life)
152,400
9/1/20
Research and development costs
217,000
$1,449,300
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account and to set up separate...
calculate the total amount for intangible assets at Dec 31,
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