Identifiable Intangibles and Goodwill, U.S. GAAP International Foods, a U.S. company, acquired two companies in 2013....

Transcribed Image Text:

Identifiable Intangibles and Goodwill, U.S. GAAP International Foods, a U.S. company, acquired two companies in 2013. As a result, its consolidated financial statements include the following acquired intangibles: Intangible Asset Customer relationships Favorable leaseholds Brand names Goodwill Date of Acquisition Fair Value at Date of Acquisition Useful Life January 1, 2013 $3,200,000 10 years June 30, 2013 4,800,000 June 30, 2013 January 1, 2013 12 years 14,400,000 Indefinite 400,000,000 Indefinite Goodwill was assigned to the following reporting units: Asia $80,000,000 South America 120,000,000 Europe Total 200,000,000 $400,000,000 It is now December 31, 2014, the end of International Foods' accounting year. No impairment losses were reported on any intangibles in 2013. Assume that International Foods bypasses step 0 of the goodwill impairment test. The following information is available on December 31, 2014: Intangible Asset Sum of Future Expected Undiscounted Cash Flows Sum of Future Expected Discounted Cash Flows Customer relationships Favorable leaseholds Brand names Reporting Unit Unit Book Value Unit Fair Value Asia South America Europe $240,000,000 $320,000,000 160,000,000 280,000,000 480,000,000 400,000,000 $960,000 4,800,000 11,200,000 $720,000 3,520,000 5,600,000 Identifiable Intangibles and Goodwill, U.S. GAAP International Foods, a U.S. company, acquired two companies in 2013. As a result, its consolidated financial statements include the following acquired intangibles: Intangible Asset Customer relationships Favorable leaseholds Brand names Goodwill Date of Acquisition Fair Value at Date of Acquisition Useful Life January 1, 2013 $3,200,000 10 years June 30, 2013 4,800,000 June 30, 2013 January 1, 2013 12 years 14,400,000 Indefinite 400,000,000 Indefinite Goodwill was assigned to the following reporting units: Asia $80,000,000 South America 120,000,000 Europe Total 200,000,000 $400,000,000 It is now December 31, 2014, the end of International Foods' accounting year. No impairment losses were reported on any intangibles in 2013. Assume that International Foods bypasses step 0 of the goodwill impairment test. The following information is available on December 31, 2014: Intangible Asset Sum of Future Expected Undiscounted Cash Flows Sum of Future Expected Discounted Cash Flows Customer relationships Favorable leaseholds Brand names Reporting Unit Unit Book Value Unit Fair Value Asia South America Europe $240,000,000 $320,000,000 160,000,000 280,000,000 480,000,000 400,000,000 $960,000 4,800,000 11,200,000 $720,000 3,520,000 5,600,000