ACCT 001A Lecture Notes - Lecture 23: Moe Williams, Intangible Asset, Cash Flow
7 Jan 2021
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Document Summary
Takes overhead costs and distributes them more equally and evenly (relevant costing and long-term decision making): Price of special order, outsourcing, adding or dropping a product line. Definite life amortization over min(economic life, legal life) legal life. If cash flow < book value, asset is impaired , and a loss is shown on the income statement. Goodwill purchase price of an entire business unit where cost is > the fair market value of the net assets (assets liabilities). i. e goodwill is the difference between cost and fmv. Fasp believes uncertainty in actual value dictates it must be expensed. International standards (distinguish between the 2: research expensed, development capitalized. Unearned revenues (gift card example cash for card, but delivery of product is a liability) Payable, accrued, unearned typical terminology formula. Working capital = current assets current liabilities. Contingent liabilities potential liabilities that may occur. (3) types: when liability is probable and can be reasonably estimated, most common are warranties sold.
