《中外比较会计ch》PPT课件.ppt

Intangible assets（P333-337/211-215）,Long-lived assets that are not physical in nature.,Operating expenses versus Intangible Assets,Intangible Assets: reasonable evidence of future benefits Expenditures for advertising campaigns? training employees?,The duration of the benefit is uncertain. - expensed When the cost is insignificantrevenue expenditure significantintangible assets,Types of Intangible assets,Patents Copyright Trademarks and trade names (brand names) Franchise/License Research and development costs (R&D) Goodwill,GE Page 49 Coco-cola Page 31,Patents(P333/211),(know-how),Patent are federal government grants giving the holder the exclusive right for 17 years to produce and sell an invention.,Dr. patens Cr. Cash and cash equivalents Amortization: 17 years Dr: Amortization expense- Patents Cr: Patents,depreciation of plant and equipment（折旧） depletion of natural resources（折耗） amortization of intangible assets(摊销）,Copyright (P334/212) For literary or artistic materials for the life of the creator plus 50 years,Trademarks and trade names (brand names P334/212),Distinctive identifications of products or services. For example, Coco-Cola.,The cost of developing a trademark or brand name often consist of advertising campaigns, which should be treated as expense when incurred. If a trademark or brand name is purchased, however, the cost may be substantial. Such cost should be capitalized and amortized to expense over a period of not more than 40 years. If the use of the trademark is discontinued or its contribution to earning becomes doubtful, any unamortized cost should be written off immediately.,Franchises/Licenses 334/212,Franchises and licenses are privilege granted by a private business or a government to sell a product or service in accordance with specified conditions, such asKFC,Goodwill (P334/212),acquisition price goodwill market value of net assets (greater-than-normal level of profitability) book value of net assets,Example (P334/212),Wal-Mart has expanded into Mexico. Suppose Wal-Mart acquired Maxana Company at a cost of $10 million. The sum of the market values of Mexanas net assets was totaled $9 million and its liabilities $1. million. Assets (Cash, receivables, etc.) 9,000,000 Goodwill 2,000,000 Liabilities 1,000,000 Cash 10,000,00,Recording goodwill in the accounts (P334/212) Because of the difficulties in objectively estimating the value of goodwill, this asset is recorded only when it is purchased. Goodwill is recorded only by the acquiring company.,(change) P2335/213 Amortization write down whenever it loses value (bad judgment instead of goodwill),Recording loss on goodwill Dr. Loss on Goodwill Cr. Goodwill,Suppose that Wal-Marts goodwill-purchased above-is worth only $1,500,000 of the first year. Dr. Loss on Goodwill 500,000 Cr. Goodwill 500,000,For another example, America onlines $54 billion write-down was an admission that its merger with Time Warner never lived up to the hype.,TranslationInternational accounting (P335/213,homework) Denmark, Sweden, and GermanyCharged directly to equity with no requirement for amortization Japan and South Korean: amortizing in 5years,But most goodwill never gets recorded! Many businesses never purchase goodwill but generate it internally by developing good customer relations, superior management, or other factors that results in above-average earnings.,Because there is no objective way of determining the value of goodwill unless the business is sold, internally generated goodwill is not recorded in the accounting records. Thus goodwill may be an important assets of a successful business but may not even appear in the companys balance sheet. The absence of internally generated goodwill is, perhaps, the principle reason why a balance sheet does not indicate a companys current market value.,In summary, the best evidence of a companys goodwill is not the amount listed in the balance sheet. Rather, it is a long and ongoing track record of above-average earnings.,Negative goodwill ( badwill ),Negative goodwill arises when the fair market value of net assets exceeds acquisition price.,Research and Development (R&D) Costs P335/213,Capitalized or Expensed? Why?,FASB statement No.2 Entities must expense R&D covered by the statement as they are incurred. (for comparability)