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 $ 41 Accounts receivable. 82 Inventory..... Other current assets. 197 39 Current assets ... Property and equipment. Goodwill.. 359 89 878 Brand . 948 Customer relationships. Favorable lease .. 203 16 Deferred tax assets 24 Other assets..... 135 Total assets acquired. $2,652 Accounts payable.. Short-term debt. .. Other current liabilities $ 144 57 99 Current liabilities 300 Deferred tax liabilities. 289 Other liabilities ... 54 Total liabilities assumed. $ 643 Less: Noncontrolling interest in joint ventures 2$ 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? What amount was al- located to tangible assets such as inventory and PPE? 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? Explain. c. How are each of the intangible assets accounted for subsequent to the acquisition? d. Describe the accounting for goodwill. Why is an impairment test difficult to apply? 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 $ 41 Accounts receivable. 82 Inventory..... Other current assets. 197 39 Current assets ... Property and equipment. Goodwill.. 359 89 878 Brand . 948 Customer relationships. Favorable lease .. 203 16 Deferred tax assets 24 Other assets..... 135 Total assets acquired. $2,652 Accounts payable.. Short-term debt. .. Other current liabilities $ 144 57 99 Current liabilities 300 Deferred tax liabilities. 289 Other liabilities ... 54 Total liabilities assumed. $ 643 Less: Noncontrolling interest in joint ventures 2$ 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? What amount was al- located to tangible assets such as inventory and PPE? 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? Explain. c. How are each of the intangible assets accounted for subsequent to the acquisition? d. Describe the accounting for goodwill. Why is an impairment test difficult to apply? 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 $ 41 Accounts receivable. 82 Inventory..... Other current assets. 197 39 Current assets ... Property and equipment. Goodwill.. 359 89 878 Brand . 948 Customer relationships. Favorable lease .. 203 16 Deferred tax assets 24 Other assets..... 135 Total assets acquired. $2,652 Accounts payable.. Short-term debt. .. Other current liabilities $ 144 57 99 Current liabilities 300 Deferred tax liabilities. 289 Other liabilities ... 54 Total liabilities assumed. $ 643 Less: Noncontrolling interest in joint ventures 2$ 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? What amount was al- located to tangible assets such as inventory and PPE? 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? Explain. c. How are each of the intangible assets accounted for subsequent to the acquisition? d. Describe the accounting for goodwill. Why is an impairment test difficult to apply? 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 $ 41 Accounts receivable. 82 Inventory..... Other current assets. 197 39 Current assets ... Property and equipment. Goodwill.. 359 89 878 Brand . 948 Customer relationships. Favorable lease .. 203 16 Deferred tax assets 24 Other assets..... 135 Total assets acquired. $2,652 Accounts payable.. Short-term debt. .. Other current liabilities $ 144 57 99 Current liabilities 300 Deferred tax liabilities. 289 Other liabilities ... 54 Total liabilities assumed. $ 643 Less: Noncontrolling interest in joint ventures 2$ 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? What amount was al- located to tangible assets such as inventory and PPE? 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? Explain. c. How are each of the intangible assets accounted for subsequent to the acquisition? d. Describe the accounting for goodwill. Why is an impairment test difficult to apply? 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 $ 41 Accounts receivable. 82 Inventory..... Other current assets. 197 39 Current assets ... Property and equipment. Goodwill.. 359 89 878 Brand . 948 Customer relationships. Favorable lease .. 203 16 Deferred tax assets 24 Other assets..... 135 Total assets acquired. $2,652 Accounts payable.. Short-term debt. .. Other current liabilities $ 144 57 99 Current liabilities 300 Deferred tax liabilities. 289 Other liabilities ... 54 Total liabilities assumed. $ 643 Less: Noncontrolling interest in joint ventures 2$ 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? What amount was al- located to tangible assets such as inventory and PPE? 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? Explain. c. How are each of the intangible assets accounted for subsequent to the acquisition? d. Describe the accounting for goodwill. Why is an impairment test difficult to apply?