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Financial Statement Analysisiii

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Submitted By abhi111nav
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FIAS

We have chosen Facebook, Inc. as the company for our analysis of intangible assets.
As per the intangible asset definition, we have divided the assets into 2 forms: 1. Non Amortizable asset i.e. Goodwill 2. Amortizable assets which include patents, acquired technology, trademarks & other intangible assets.

As for goodwill, the impairment loss is NIL for both the accounting periods.
We have shown the values in the tabular form and have done a comparison between the years at the last of the analysis.
Amortization is done by the straight-line method by facebook, however the useful life of the assets has been provided in the range of the years and not in the specific years.

Submitted By: Submitted To:
Abhinav Sharma (14B102) Prof. Vishwanathan Iyer
Visweswaran (14B123)

As we can see that, Goodwill (NET) and intangible assets (NET) are increasing from 1388 million to 1722 million. The NET increase in the value is: 334 million.
The split is as shown below: 1. Goodwill(NET Increase of 252 million)

2. Intangible Assets(NET increase of 82 million)

Impairment (As of 31st December 2013, No Impairment has been identified)

Amortization:
Amortization as shown in the figure as (255-110) = 145 million.

For Patents: Patents | 2013(Million) | 2012(Million) | Gross Carrying Amount | 773 | 684 | Accumulated Amortization | 142 | 53 | Net Carrying Amount | 631 | 631 |

Patents acquired in the year 2013 are equal to $89 million. $92 million comprises $89 million towards patents and $3 million towards other intangible assets.

For Acquired Technology: Acquired Technology | 2013(Million) | 2012(Million) | Gross Carrying Amount | 227 | 133 | Accumulated Amortization | 65 | 32 | Net Carrying Amount | 162 | 101 |

Acquired Technology acquired in the year 2013 is equal to (227-133) = $94 million.

For Trademark & Other: Trademark & Other | 2013(Million) | 2012(Million) | Gross Carrying Amount | 138 | 94 | Accumulated Amortization | 48 | 25 | Net Carrying Amount | 90 | 69 |

Trademark and Others acquired in the year 2013 is equal to (138-94) = $44 million.

As already mentioned and shown above $41 million is for trademarks and $3 million is for other intangible assets. ($92-89=$3 million).

As we can see that, Goodwill (NET) and intangible assets (NET) are increasing from 162 million to 1388 million. The NET increase in the value is: 1226 million.

The split is as shown below: 1. Goodwill($505 million)

2. Intangible Assets(NET increase of 721 million)

Impairment (As of 31st December 2013, No Impairment has been identified)

Amortization:
Amortization as shown in the figure as (110-32) = 78 million.

For Patents: Patents | 2012(Million) | 2011(Million) | Gross Carrying Amount | 684 | 51 | Accumulated Amortization | 53 | 4 | Net Carrying Amount | 631 | 47 |

Patents acquired in the year 2012 are equal to $633 million.
For Acquired Technology: Acquired Technology | 2012(Million) | 2011(Million) | Gross Carrying Amount | 133 | 38 | Accumulated Amortization | 32 | 15 | Net Carrying Amount | 101 | 23 |

Acquired Technology acquired in the year 2012 is equal to $94 million. 1. Instagram ($74 Million) 2. Others ($20 million)

For Trademark & Other: Trademark & Other | 2012(Million) | 2011(Million) | Gross Carrying Amount | 94 | 23 | Accumulated Amortization | 25 | 13 | Net Carrying Amount | 69 | 10 |

Trademark and Others acquired in the year 2012 is equal to = $72 million.

Acquired Technology acquired in the year 2012 is equal to $94 million. 1. Instagram ($64 Million) 2. Others ($8 million)

Comparison between 2013 & 2012 Annual Reports | 2013 | 2012 | 2011 | Change from2012 | Change from2011 | Gross Patents Acquired | 773 | 684 | 51 | 13.01% Increase | 1241% Increase | Acquired Technology | 227 | 133 | 38 | 70.67% Increase | 250% Increase | Trademarks & Others | 138 | 94 | 23 | 46.80% Increase | 308% Increase | Goodwill | 839 | 587 | 82 | 42.93% Increase | 615% Increase |

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