Identifiable Intangibles

Brightcove, Inc. acquires Ciber, Inc. for $75 million in cash and accounts for the acquisition as a merger. Ciber's balance sheet at the date of acquisition is as follows (in thousands):

	Book Value	Fair Value
Current assets	$600	$450
Plant and equipment	18,000	6,000
Licenses and trademarks	7,500	10,500
Total assets	$26,100
Current liabilities	$1,200	1,200
Long-term liabilities	15,000	16,500
Capital stock	12,000
Retained earnings	(2,100)
Total liabilities and equity	$26,100

Brightcove hires a consultant to identify and value any previously unreported intangible assets attributable to Ciber at the date of acquisition. The consultant identifies the following intangibles:

(in thousands)	Fair Value
Customer contracts	$1,500
Assembled workforce	30,000
Brand names	7,500
Leases at rents below current market	600
Developed technology	2,250
In-process research and development	450
Future cost savings from elimination of duplicate assets	1,200
Additional expected revenues from bundling products	900

a. Identify which of the above intangible assets meet the criteria for recognition as identifiable intangibles per ASC Topic 805. Which of the following includes all the assets that meet the criteria?

Customer contracts, Assembled workforce, Brand names, Developed technology, and In-process R&D

Customer contracts, Brand names, Favorable leases, Developed technology, and In-process R&D

Customer contracts, Brand names, Developed technology, In-process R&D, and Additional expected revenues

Customer contracts, Brand names, Favorable leases, Developed technology, and Future cost savings from duplicate assets

b. Calculate the goodwill to be reported for this acquisition.

When appropriate, use negative signs with your fair value of identifiable net asset answers (left column only). Do not use negative signs in the right column.

Price paid		$Answer
Fair value of identifiable net assets:
Current assets	$Answer
Plant and equipment	Answer
Licenses and trademarks	Answer
Customer contracts	Answer
Brand names	Answer
AnswerFuture cost savings from duplicate assetsFavorable leasesAssembled workforceAdditional expected revenues	Answer
AnswerDeveloped technologyAdditional expected revenuesAssembled workforceFuture cost savings from duplicate assets	Answer
AnswerAdditional expected revenuesFuture cost savings from duplicate assetsIn-process R&DAssembled workforce	Answer
Current liabilities	Answer
Long term liabilities	Answer	Answer
Goodwill		$Answer

c. Prepare the journal entry Brightcove makes to record the acquisition.

General Journal
Description	Debit	Credit
Current assets	Answer	Answer
Plant and equipment	Answer	Answer
Licenses and trademarks	Answer	Answer
Customer contracts	Answer	Answer
Brand names	Answer	Answer
AnswerFuture cost savings from duplicate assetsFavorable leasesAdditional expected revenuesAssembled workforce	Answer	Answer
AnswerDeveloped technologyAdditional expected revenuesFuture cost savings from duplicate assetsAssembled workforce	Answer	Answer
Answer: In-process R&DAssembled workforceFuture cost savings from duplicate assetsAdditional expected revenues	Answer	Answer
Goodwill	Answer	Answer
Current liabilities	Answer	Answer
Long term liabilities	Answer	Answer
AnswerNote payableCashCapital StockEarnout liability	Answer	Answer