Allocating Purchase Price Capri Holdings, the parent company of Michael Kors and Jimmy Choo, reports the...

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Allocating Purchase Price Capri Holdings, the parent company of Michael Kors and Jimmy Choo, reports the following footnote to its 10-K report dated March 31, 2019. On December 31, 2018, the Company completed the acquisition of Versace for a total enterprise value of approximately 1.753 billion (or approximately $2.005 billion). The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition (in millions). December 31, 2018 Cash and cash equivalents Accounts receivable $41 82 Inventory 197 Other current assets 39 Current assets 359 Property and equipment 89 Goodwill 878 Brand 948 Customer relationships 203 Favorable lease 16 Deferred tax assets 24 Other assets 135 Total assets acquired $2,652 Accounts payable $144 Short-term debt 57 Other current liabilities Current liabilities 99 300 Deferred tax liabilities 289 Other liabilities 54 Total liabilities assumed 643 Less: Noncontrolling interest in joint ventures $4 Fair value of net assets acquired $2,005 Fair value of acquisition consideration $2,005 a. Of the total assets acquired, what portion is allocated to net intangible assets? Round answer to the nearest percentage. 0 % b. Are Versace's assets and liabilities reported on the Capri Holdings consolidated balance sheet at the book value or at the fair value on the date of the acquisition? c. How are each of the intangible assets accounted for subsequent to the acquisition? Ointangible assets with a determinable life are amortized over their useful lives; intangible assets with an indeterminate useful life are amortized over a 10 year period and are tested annually for impairment. Ointangible assets with a determinable life are amortized over their useful lives; intangible assets with an indeterminate useful life are not amortized, but are tested annually for impairment. Ointangible assets with a determinable life are amortized over their useful lives; intangible assets with an indeterminate useful life are not amortized, nor are they tested annually for impairment Ointangible assets with a determinable life are amortized over their useful lives; intangible assets with an indeterminate useful life are amortized over 15 years and are tested annually for impairment. d. Describe the accounting for goodwill. OGoodwill is not amortized, but is tested for impairment at least annually. OGoodwill is not amortized, but tested for impairment every 5 years. OGoodwill is amortized over 20 years and tested for impairment at least annually. OGoodwill is not amortized, but tested for impairment every 10 years. Allocating Purchase Price Capri Holdings, the parent company of Michael Kors and Jimmy Choo, reports the following footnote to its 10-K report dated March 31, 2019. On December 31, 2018, the Company completed the acquisition of Versace for a total enterprise value of approximately 1.753 billion (or approximately $2.005 billion). The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition (in millions). December 31, 2018 Cash and cash equivalents Accounts receivable $41 82 Inventory 197 Other current assets 39 Current assets 359 Property and equipment 89 Goodwill 878 Brand 948 Customer relationships 203 Favorable lease 16 Deferred tax assets 24 Other assets 135 Total assets acquired $2,652 Accounts payable $144 Short-term debt 57 Other current liabilities Current liabilities 99 300 Deferred tax liabilities 289 Other liabilities 54 Total liabilities assumed 643 Less: Noncontrolling interest in joint ventures $4 Fair value of net assets acquired $2,005 Fair value of acquisition consideration $2,005 a. Of the total assets acquired, what portion is allocated to net intangible assets? Round answer to the nearest percentage. 0 % b. Are Versace's assets and liabilities reported on the Capri Holdings consolidated balance sheet at the book value or at the fair value on the date of the acquisition? c. How are each of the intangible assets accounted for subsequent to the acquisition? Ointangible assets with a determinable life are amortized over their useful lives; intangible assets with an indeterminate useful life are amortized over a 10 year period and are tested annually for impairment. Ointangible assets with a determinable life are amortized over their useful lives; intangible assets with an indeterminate useful life are not amortized, but are tested annually for impairment. Ointangible assets with a determinable life are amortized over their useful lives; intangible assets with an indeterminate useful life are not amortized, nor are they tested annually for impairment Ointangible assets with a determinable life are amortized over their useful lives; intangible assets with an indeterminate useful life are amortized over 15 years and are tested annually for impairment. d. Describe the accounting for goodwill. OGoodwill is not amortized, but is tested for impairment at least annually. OGoodwill is not amortized, but tested for impairment every 5 years. OGoodwill is amortized over 20 years and tested for impairment at least annually. OGoodwill is not amortized, but tested for impairment every 10 years.