Ch 7 Case 1

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Chris Garza

Ch 7- Case 1

2. In periods subsequent to initial measurement, is goodwill amortized?

(1) Performed a key word search using goodwill, amortized. I scrolled down to section 35 subsequent measurement of topic 350 Intangibles- Goodwill and other.

(2) 350-20-35-1   Goodwill shall not be amortized. Instead, goodwill shall be tested for impairment at a level of reporting referred to as a reporting unit. (Paragraphs 350-20-35-33 through 35-46 provide guidance on determining reporting units.)

(3) I found my conclusion in section 35 subsequent measurements

3. Generally, how are guarantees measured?

(1) I performed a keyword search using Guarantees as my key word. I noticed 460 Guarantees was the topic number. I then located the initial measurement from there.

(2)
>     Fair Value Objective
460-10-30-2   Except as indicated in paragraphs 460-10-30-3 through 30-4, the objective of the initial measurement of a guarantee liability is the fair value of the guarantee at its inception. For example: a.  If a guarantee is issued in a standalone arm’s-length transaction with an unrelated party, the liability recognized at the inception of the guarantee shall be the premium received or receivable by the guarantor as a practical expedient.  b.  If a guarantee is issued as part of a transaction with multiple elements with an unrelated party (such as in conjunction with selling an asset or entering into an operating lease), the liability recognized at the inception of the guarantee should be an estimate of the guarantee’s fair value. In that circumstance, a guarantor shall consider what premium would be required by the guarantor to issue the same guarantee in a standalone arm’s-length transaction with an unrelated party as a practical expedient.  c.  If a guarantee is issued as a contribution to an unrelated party, the liability recognized at the inception of the guarantee shall be measured at its fair value, consistent with the requirement...
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