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In: Accounting
Amortization and Impairment Testing of Identifiable Intangible Assets During the year ended July 30, 2016, Cisco...
Amortization and Impairment Testing of Identifiable Intangible Assets
During the year ended July 30, 2016, Cisco Systems, Inc. acquired the following identifiable intangible assets through its purchase of two companies (in thousands):
| Limited Lives | Indefinite Lives | |||||
|---|---|---|---|---|---|---|
| Technology | Customer Relationships | IPR&D | ||||
|
Acquired Company (in thousands) |
Useful life (in years) |
Amount | Useful life (in years) |
Amount | Amount | |
| Lancope, Inc | 5 | $79,000 | 6 | $29,000 | $121,000 | |
| Jasper Technologies, Inc | 6 | 240,000 | 7 | 75,000 | 23,000 | |
Cisco acquired Lancope, Inc. in December 2015, and Jasper
Technologies, Inc. in March 2016. Cisco separately tests
identifiable intangibles acquired from each company for impairment,
and collects the following information to conduct impairment tests
at the end of fiscal 2016 (in thousands):
| Technology | Customer Relationships | IPR&D | ||||
|---|---|---|---|---|---|---|
|
Acquired Company (in thousands) |
Sum of expected undiscounted cash flows |
Sum of expected discounted cash flows |
Sum of expected undiscounted cash flows |
Sum of expected discounted cash flows |
Sum of expected undiscounted cash flows |
Sum of expected discounted cash flows |
| Lancope, Inc | $70,000 | $65,000 | $25,000 | $20,000 | $130,000 | $105,000 |
| Jasper Technologies, Inc | 200,000 | 150,000 | 80,000 | 65,000 | 30,000 | 26,000 |
Required
a. Calculate amortization expense for the above identifiable intangibles for fiscal 2016. Intangibles are amortized on a straight-line basis starting in the month following acquisition.
- Round answers to the nearest whole number.
- Enter answers in thousands.
| Acquired Company | Technology | Customer Relationships |
|
|---|---|---|---|
| Lancope, Inc. | $Answer | $Answer | |
| Jasper Technologies, Inc. | Answer | Answer |
b. Calculate impairment losses for fiscal 2016.
- Round answers to the nearest whole number.
- Enter answers in thousands.
| Acquired Company | Technology | Customer Relationships |
IPR&D | |
|---|---|---|---|---|
| Lancope, Inc. | $Answer | $Answer | $Answer | |
| Jasper Technologies, Inc. | Answer | Answer | Answer |
c. Determine the amounts reported on Cisco’s fiscal 2016 balance sheet for technology, customer relationships, and in-process R&D.
- Round answers to the nearest whole number.
- Enter answers in thousands.
| Amounts reported on Cisco's fiscal 2016 balance sheet | ||
|---|---|---|
| Technology | $Answer | |
| Customer Relationships | Answer | |
| IPR&D | Answer | |
Solutions
ekkarill92 answered 11 months agoRelated Solutions
Amortization and Impairment Testing of Identifiable Intangible Assets During the year ended July 30, 2016, Cisco...
Amortization and Impairment Testing of Identifiable
Intangible Assets
During the year ended July 30, 2016, Cisco Systems, Inc.
acquired the following identifiable intangible assets through its
purchase of two companies (in thousands):
Limited Lives
Indefinite Lives
Technology
Customer Relationships
IPR&D
Acquired Company
(in thousands)
Useful life
(in years)
Amount
Useful life
(in years)
Amount
Amount
Lancope, Inc
5
$79,000
6
$29,000
$121,000
Jasper Technologies, Inc
6
240,000
7
75,000
23,000
Cisco acquired Lancope, Inc. in December 2015, and Jasper
Technologies,...
Briefly explain why asset impairment testing is a two-step process for tangible assets and identifiable intangible...
Briefly explain why asset impairment testing is a two-step
process for tangible assets and identifiable intangible assets with
limited lives, but is only a one-step process (with a different
test) for identifiable intangible assets with an indefinite
life
Briefly explain why asset impairment testing is a two-step process for tangible assets and identifiable intangible...
Briefly explain why asset impairment testing is a two-step
process for tangible assets and identifiable intangible assets with
limited lives, but is only a one-step process (with a different
test) for identifiable intangible assets with an indefinite
life.
Following is selected financial information from Cisco Systems Inc. for the year ended July 30, 2016...
Following is selected financial information from Cisco Systems
Inc. for the year ended July 30, 2016 ($ millions).
Cash,endingyear ................ $
7,631 Totalliabilities..................
$ 58,067
Cash from operating activities . . . . . . .
13,570 Cash
from financing activities . . . . . (4,699)
Sales...........................
49,247 Noncashassets
................ 114,021
Stockholders’equity ..............
63,585 Cashfrominvestingactivities......
(8,117) Costofgoodssold................
18,287 Netincome....................
10,739
Totalexpenses(otherthancostof Cash,beginningyear............
6,877
goodssold)..................20,221 f
Prepare the income statement, balance sheet and the statement
of cash flows for Cisco System for the fiscal year ended...
the journal entry to record the amortization of intangible assets is a debit accumulated amortization, credit...
the journal entry to record the amortization of intangible
assets is
a debit accumulated amortization, credit amortization
expense
b debit amortization expense, credit the intagible asset
c debit amortization expense, credit accummulated
amortization
d both B and C correct
Amortization of Intangibles For each of the following intangible assets, indicate the amount of amortization expense...
Amortization of Intangibles
For each of the following intangible assets, indicate the amount
of amortization expense that should be recorded for the year 2017
and the amount of accumulated amortization on the balance sheet as
of December 31, 2017.
Trademark
Patent
Copyright
Cost
$37,200
$47,800
$64,800
Date of purchase
1/1/10
1/1/12
1/1/15
Useful life
indefinite
10 yrs.
20 yrs.
Legal life
undefined
20 yrs.
50 yrs.
Method
SL*
SL
SL
*Represents the straight-line method.
If an amount is zero, enter...
Briefly write about the procedure for impairment of intangible assets with suitable examples.
Briefly write about the procedure for impairment of
intangible assets with suitable examples.
7. Briefly write about the procedure for impairment of intangible assets with suitable examples.
7. Briefly write about the procedure for impairment of
intangible assets with suitable examples.
List the period of amortization, if any, for the following four types of Intangible assets. If...
List the period of amortization, if any, for the following four
types of
Intangible assets. If there is no period of amortization, please
briefly
(1-2 sentences) explain why.
Patents
Copyrights
Trademarks
Goodwill
1) Explain why the impairment of intangible assets causes such difficulty to companies when preparing their...
1) Explain why the impairment of intangible assets causes such
difficulty to companies when preparing their accounts.
2) Explain why comparative information is required to be
provided in the financial statements.
3)
The following information is provided concerning the accounts of
Jazzy Ltd.
You are asked to identify how each of these items is shown in
the financial statements.
(a)
gain on revaluation of available-for-sale investments
(b)
dividends paid during the year
(c)
revaluation gain on building (not reversing any...
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