or loss experienced by Hurst in reacquiring its 8% bonds? (Assume
the firm used straight-line amortization.) Show calculations.
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ACCT 551 Week 1 Discussion BE12-2, BE12-3, BE12-7,
BE12-6, BE 12-12, Ex 12-15
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BE12-2 makes us learn that if any legal cost is incurred to defend an
intangible assets it should be added to the book value of intangible
asset and depreciated over its remaining useful life. Book Value is
determined by subtracting amortization till the date of incurring
legal cost from the purchase price.
BE12-3 provides us repeated practice to record amortization on
intangible asset
The take away from BE12-7 is how to test goodwill for impairment.
We test goodwill for impairment by comparing the Fair Value (FV)
with the Carrying Value(CV) of the reporting unit. If FV is less
than CV then we proceed further to test goodwill for impairment.