What SFAS 142?

What SFAS 142?

SFAS 142 means the Statement of Financial Accounting Standards No. 142 (Goodwill and Other Intangible Assets), as issued by the Financial Accounting Standards Board in June, 2001, and applicable to all fiscal years beginning after December 15, 2001.”

What is fas141?

FAS 141(R) is the result of a joint project between FASB and the International Accounting Standards Board to create convergence between U.S. and international financial reporting standards for purchase accounting.

When an investor is deemed to have control over an investee?

Terms in this set (18) When an investor is deemed to have “control” over an investee, GAAP requires presentation of consolidated financial statements.

What does SFAS 142 require with respect to accounting for goodwill?

SFAS 142 requires that management assess goodwill for impairment on an annual basis allowing management to make a judgment regarding the appropriate value of goodwill. Management must compare the fair value of the reporting unit with its carrying value.

Has SFAS 142 improved the usefulness of goodwill impairment loss and goodwill balances for investors?

Overall, the findings suggest that despite the concerns of critics over the reliability of fair value estimates of goodwill, (1) SFAS 142 has improved the usefulness of goodwill numbers from investor perspective, and (2) investors see through the differences in reliability of reported goodwill numbers.

How does US GAAP differ from IFRS with respect to presenting consolidated financial statements?

The primary difference between the two systems is that GAAP is rules-based and IFRS is principles-based. This disconnect manifests itself in specific details and interpretations.

What is the meaning of control of an investee?

Control of an investee starts with a definition: An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. ( IFRS 10 6)

Which circumstances would trigger the need for an investor to reassess whether it controls an investee?

An investment manager shall reassess whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

When can you write off goodwill?

If goodwill has been assessed and identified as being impaired, the full impairment amount must be immediately written off as a loss. An impairment is recognized as a loss on the income statement and as a reduction in the goodwill account.

How many years can you write off goodwill?

Any goodwill created in an acquisition structured as an asset sale/338 is tax deductible and amortizable over 15 years along with other intangible assets that fall under IRC section 197. Any goodwill created in an acquisition structured as a stock sale is non tax deductible and non amortizable.

What are to be disclosed under intangible assets?

Such an asset is identifiable when it is separable, or when it arises from contractual or other legal rights. Separable assets can be sold, transferred, licensed, etc. Examples of intangible assets include computer software, licences, trademarks, patents, films, copyrights and import quotas.

Is goodwill an investment?

Goodwill is a premium paid over fair value during a transaction and cannot be bought or sold independently. Meanwhile, other intangible assets include the likes of licenses and can be bought or sold independently. Goodwill has an indefinite life, while other intangibles have a definite useful life.

What is a FIN 48 reserve?

The FIN 48 process is used to ensure that a tax-related asset or liability actually exists at the date the financial statements are prepared and that the tax position will be sustained on review by the tax authorities.

What are some potential conflicts between US GAAP and IFRS?

One major difference between GAAP and IFRS is their methodology, with GAAP being rules-based and the latter being principles-based. This difference has posed a challenge in areas such as consolidation, the income statement, inventory, the earnings-per-share (EPS) calculation, and development costs.

What is the FASB Statement of financial accounting standards 142?

In keeping with the trend toward using fair value accounting to enhance the presentation of assets or liabilities, the FASB issued the Statement of Financial Accounting Standards 142 (SFAS 142), Goodwill and Other Intangible Assets ( 2001b ).

What is SFAS 142 and why is it important?

The objective of SFAS 142 is to improve a faithful representation of intangible assets with indefinite lives by eliminating the systematic amortization and applying reinforced fair value impairment tests. The results of the enactment of SFAS 142 have had a significant economic impact on financial reports.

What is the difference between SFAS 121 and SFAS 144?

SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, FASB (2001C) superseded SFAS 121 in 2001. This statement retained the general provisions of SFAS 121, with the exception of asset groupings and elimination of goodwill and other intangible assets with unlimited lives from the scope.

What is a synonym for superseded?

Synonyms of superseded. to take the place of. that edition of the dictionary that you have has been superseded by a more recent one. Synonyms for superseded. cut out, displaced, displanted, relieved, replaced,