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 Carrying 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 |
Compute 2014 amortization expense and impairment losses on the above intangibles, following U.S. GAAP.
Enter answers in millions, using decimal places when applicable.
(in millions) | |
---|---|
Amortization expense - identifiable intangibles | Answer
|
Impairment losses - identifiable intangibles | Answer
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Goodwill impairment loss | Answer
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Total | Answer |
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