|
Generally Accepted Accounting Principles
|
| U.S. GAAP Codification | Accounting Topics |
| Principles of Accounting, U.S. GAAP Financial Reporting Guide |
| Accounting by Topic, Accounting Terms Dictionary |
| SFAS No. 141 |
Statement of Financial Accounting Standards (SFAS) No. 141 a. Business Combinations b. Issued in June 2001 c. Supersedes APB Opinion No. 16, "Business Combinations." Purchase Method only a. All business combinations --> required to use purchase method. b. Pooling of interests method is not allowed. [APB Opinion No. 16] a. Business combinations meeting certain requirements --> Pooling of interests method should be used. b. All other business combinations --> Purchased method should be used. Goodwill a. Fair value of net assets acquired < Purchase cost of net assets acquired b. Goodwill = Purchase cost - Fair value of net assets c. Goodwill is recognized as an asset. Negative Goodwill a. Fair value of net assets acquired > Purchase cost of net assets acquired b. Negative Goodwill = Fair value of net assets - Purchase cost --> Excess of fair value over cost c. Such excess is allocated --> to reduce the cost of non-current assets acquired (except certain assets). d. Remaining excess after reducing the cost of non-current assets acquired to zero --> recognized as extraordinary gain. Accounting for Goodwill (SFAS No. 142) a. Goodwill is not amortized. --> Goodwill is tested for impairment b. Impaired --> fair value < carrying amount c. Test for impairment --> on an annual basis d. If certain events would reduce fair value below carrying amount, --> test for impairment is done between annual tests. |
| Copyright © CPAclass.comTM Legal Disclaimer |