or the purchase of 60% of Belvedere, LVMH originally paid a cash total of 142 million last year, of which 14 million was a premium over LVMHs proportional share of Belvederes net assets at book value at acquisition. 8 million of this excess was attributed to identifiable intangible assets with estimated useful lives of five years, straight-line depreciation and no salvage value. IFRS Rule

The following data are available for Belvedere in the current fiscal year: Net income = 25 million, and net assets (book value at end of year after all adjustments) = 288 million.

For the investment in Belvedere, 1. Determine the amount of partial goodwill that LVMH would most likely report on its consolidated balance sheet at acquisition. Do not put any comma or $ sign, and round your answers to the closest dollar. If none, write 0. Express the answer as dollar numbers, for example, if 1 million, write 1000000.

2. Determine the incremental impact of this investment on depreciation and amortization for the consolidated company in the current fiscal year. Do not put any comma or $ sign, and round your answers to the closest dollar. If none, write 0. Express the answer as dollar numbers, for example, if 1 million, write 1000000.

3. Determine the impact of the incremental depreciation of the consolidated company on the net income attributable to minority interest. Write 1 for higher, 2 for lower, and 3 for unchanged.

4. Calculate the net income impact of this investment for the consolidated company in the current fiscal year assuming the consolidation method with partial goodwill is used. Do not put any comma or $ sign, and round your answers to the closest dollar. If none, write 0. Express the answer as dollar numbers, for example, if 1 million, write 1000000.

5. The company has a choice to report full goodwill under IFRS. Determine the full goodwill for the consolidated company. Do not put any comma or $ sign, and round your answers to the closest dollar. If none, write 0. Express the answer as dollar numbers, for example, if 1 million, write 1000000.

6. If the Belvedere investment was accounted for with full goodwill, would net income for the consolidated company be higher or lower or unchanged when compared to partial goodwill? Write 1 for higher, 2 for lower, and 3 for unchanged.

7. Determine the amount of goodwill impairment, if any, that LVMH would most likely recognize for the investment in the current fiscal year under partial goodwill. Assume appraisal shows fair value minus cost to sell of Belvedere was at 280 million. Value-in-use was 284 million. Do not put any comma or $ sign, and round your answers to the closest dollar. If none, write 0. Express the answer as dollar numbers, for example, if 1 million, write 1000000.

8. Determine the amount of goodwill impairment, if any, that LVMH would most likely recognize for the investment in the current fiscal year under full goodwill. Assume appraisal shows fair value minus cost to sell of Belvedere was at 285 million. Value-in-use was 280 million. Do not put any comma or $ sign, and round your answers to the closest dollar. If none, write 0. Express the answer as dollar numbers, for example, if 1 million, write 1000000.

9. If the Belvedere investment was accounted for using the equity method, would ROE be higher or lower relatively under the consolidation method? Write 1 for higher, 2 for lower, and 3 for unchanged.

10. If the Belvedere investment was accounted for using the equity method, would ROA be higher or lower relatively under the consolidation method?