Question: PLEASE HELP WITH THESE MULTIPLE CHOICE PROBLEMS!!! Falcon Company reports the following intangibles at December 31, 2016, prior to impairment testing. Book Value Customer Lists
PLEASE HELP WITH THESE MULTIPLE CHOICE PROBLEMS!!!
Falcon Company reports the following intangibles at December 31, 2016, prior to impairment testing.
Book Value
Customer Lists $1,500,000
Brand Names $5,200,000
Goodwill $8,000,000
The customer lists have a limited life and amortization for the year has already been properly recorded. The brand names have indefinite lives. The goodwill is allocated to Divisions Blue and White for both U.S. GAAP and IFRS. Assume Falcon bypasses Step 0 qualitative assessment for both the brand names and goodwill. On 12/31/2016, the following information is available.
Blue Division White Division
Book Value of Goodwill $ 1,600,000 $ 6,400,000
FV of Division $14,000,000 $20,000,000
BV of Division $16,000,000 $24,000,000
FV of identifiable net assets of the Division $13,000,000 $12,000,000
Intangible Asset Total expected Total expected
Future cash inflows Future cash flows
Undiscounted Discounted
Customer Lists $1,600,000 $1,200,000
Brand Names $4,000,000 $3,400,000
QUESTION 7:
Impairment loss for 2016 under IFRS for the customer lists and brand names is
| a. | $300,000 |
| b. | $1,800,000 |
| c. | $2,100,000 |
| d. | $0 |
QUESTION 8:
Goodwill impairment loss for 2016 under IFRS is
| a. | $6,000,000 |
| b. | $5,600,000 |
| c. | $600,000 |
| d. | $0 |
QUESTION 9:
Goodwill impairment loss for 2016 under U.S. GAAP is
| a. | $0 |
| b. | $6,000,000 |
| c. | $5,600,000 |
| d. | $600,000 |
QUESTION 10:
Impairment loss for 2016 under U.S. GAAP for the customer lists and brand names is
| a. | $2,100,000 |
| b. | $1,800,000 |
| c. | $0 |
| d. | $300,000 |
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