Adobe Systems, Inc., reports the following footnote to its \(10-\mathrm{K}\) report.

a. Of the total assets acquired, what portion is allocated to net tangible assets?

b. Are the assets (both tangible and intangible) of Macromedia reported on the consolidated balance sheet at the book value or at the fair value on the date of the acquisition? Explain.

c. How are the tangible and intangible assets accounted for subsequent to the acquisition?

d. Describe the accounting for goodwill. Why is an impairment test difficult to apply?

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During fiscal 2006, we completed the acquisition of Macromedia, a povider of software technologies that enables the development of a wide range of Internet and mobile application solutions... The total $3.5 billion purchase price is allocated to the acquired net assets of Macromedia based on their estimated fair values as of December 3, 2005, and the associated estimated useful lives at that date: (in 000s) Net tangible assets.... Identifiable intangible assets Acquired product rights. Customer contracts and relationships. Non-competition agreements.. Trademarks.. Goodwill.... Stock-based compensation.. Total purchase price.... Amount $ 713,164 365,500 183,800 500 130,700 1,993,898 150,951 $3,538,513 Estimated Useful Life N/A 4 years 6 years 2 years 5 years N/A 2.18 years