Question
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
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 | Date of Acquisition | Fair Value at Date of Acquisition | Useful Life |
---|---|---|---|
Customer relationships | January 1, 2013 | $6,400,000 | 8 years |
Favorable leaseholds | June 30, 2013 | 9,600,000 | 16 years |
Brand names | June 30, 2013 | 28,800,000 | Indefinite |
Goodwill | January 1, 2013 | 800,000,000 | Indefinite |
Goodwill was assigned to the following reporting units:
Asia | $160,000,000 |
South America | 240,000,000 |
Europe | 400,000,000 |
Total | $800,000,000 |
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 | $1,920,000 | $1,440,000 |
Favorable leaseholds | 9,600,000 | 7,040,000 |
Brand names | 22,400,000 | 11,200,000 |
Reporting Unit | Unit Book Value | Unit Fair Value |
---|---|---|
Asia | $480,000,000 | $640,000,000 |
South America | 320,000,000 | 560,000,000 |
Europe | 960,000,000 | 800,000,000 |
Unit book values are already adjusted for appropriate 2014 amortization and impairment of identifiable intangibles.
Compute 2014 amortization expense and impairment losses on the above intangibles, following U.S. GAAP.
Enter answers in millions, using decimal places when applicable. Please help me with the below
(in millions) | |
---|---|
Amortization expense - identifiable intangibles | x |
Impairment losses - identifiable intangibles | x |
Goodwill impairment loss | x |
Total | x |
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