will maintain the rights to the Rapido trade name as a defensive intangible asset to prevent its use by competitors, despite the fact that its highest and best use would be to sell the trade name. Ahorita estimates that the trade name has an internal value of $1.5 million, but if sold would yield $2 million. Answer the following with supporting citations from the FASB ASC: a. How does the FASB ASC Glossary define a defensive intangible asset? A: A defensive intangible asset could include
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currently owns the ten-story building where they are headquartered. Recently, Company X decided it would be in their best interest to relocate their headquarters. As a result Company X has identified two properties that are more suitable but whose fair market values slightly exceed that of the current ten-story building: 1. Single-story building on a large, attractive lot. (If the company were to select this property it intends to demolish the building and build a specially designed building on the
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Problem 11-40 Debbie Davis and Elizabeth Engels exchanged like-kind property. Debbie had an adjusted basis of $12,000 in her property (fair market value is $15,000). Elizabeth’s property had adjusted bases of $9,000 and a fair market value of $ 10,500, and Elizabeth gave Debbie $4,500 in cash. Determine Debbie’s and Elizabeth’s realized gain or loss, recognized gain or loss, and the basis in their new property.
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testimony that they intentionally made all other contributions in batches worth less than $250 requires the assumption that they made these donations, with an alleged value of $24,200, on 97 distinct occasions. This assumption is implausible and has no support in the record. • Petitioners testified that they did not assign values to the donated items until they prepared their tax return in 2012. That being so, it is hard to see how they could have ensured, at the time they contributed the property
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to the basis of the land. A) True B) False 2. The basis for nonbusiness property changed to business use is the greater of the adjusted basis of the property or its fair market value on the date it is converted to business use. A) True B) False 3. In 2011, Tom Turner received a gift of property that had a fair market value of $10,000 at the time of the gift. The donor's adjusted basis in the property at the time of the gift was $12,000. Tom's basis for computing depreciation is $12,000.
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CONS OF FAIR VALUE ACCOUNTING Abstract The speed of globalization in the capital markets and the increasing complexity of financial instruments have caused financial statement users to question the relevance and usefulness of historical cost accounting (HCA). The propensity to use fair value accounting (FVA) is imminent as we enter into a borderless economy and as financial markets evolve that require more current and relevant financial information. The U.S. Generally Accepted Accounting Principles
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surrounding fair value accounting, this assignment concerns about the discussion of fair value measurement under both the International Accounting Standard Board (IASB) and US national standard-setter, the Financial Accounting Standards Accounting (FASB). So far, IASB and FASB have created a uniform framework for how to measure fair value for entities around the world. By publishing IFRS 13 Fair Value Measurement, the IASB established a single source of guidance under IFRS for all fair value measurements
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book value of equity and the ability of earnings is derived from two separate accounting systems in order to predict prospect cash flows. The two accounting systems put into account are the accounting system found under the implementation of present accounting standards, also known as the mixed attribute system of accounting. The second accounting system is the market data where the data is used as an alternative for a fair value system of accounting. The mixed attribute system of accounting is often
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Choosing Cost versus Fair Value: International Evidence from the European Real Estate Industry Upon Adoption of IFRS Karl A. Muller, III Pennsylvania State University Edward J. Riedl * Harvard Business School Thorsten Sellhorn Ruhr-Universität Bochum PRELIMINARY – PLEASE DO NOT QUOTE WITHOUT PERMISSION December 2007 ABSTRACT: We examine the determinants of investment property firms’ choice to use the cost or fair value model to account for their primary asset, real estate
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http://hbr.org/2013/03/why-fair-value-is-the-rule/ar/2 For the past two decades, fair value accounting—the practice of measuring assets and liabilities at estimates of their current value—has been on the ascent. This marks a major departure from the centuries-old tradition of keeping books at historical cost. It also has implications across the world of business, because the accounting basis—whether fair value or historical cost—affects investment choices and management decisions, with consequences
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