Formulas

Question 1

F1. What is the Segment Profit (Loss) formula?

Answer 1

Revenues
Less: Directly traceable costs
Less: Reasonable allocated costs (by CFO)
Equals: Operating profit (loss) for that segment

Question 2

F1. What is the Income Tax expense formula for Interim Reporting?

Answer 2

YTD Income
X Effective Tax rate
Less: Income tax expense recorded prior year

Note: If income is given for more than 1 year then add them together and multiply x effective expected tax rate, then subtract any previously booked income tax expense.

Question 3

F2. How should the costs of capitalized computer software developed for resale be amortized under US GAAP?

Answer 3

Amortization is the greater of:
Percent of Revenue method= Total capitalized amount x current gross revenue for period / Total projected gross revenue for the period.
Straight-line= Total capitalized amount x
1/Estimated economic life

Question 4

F2. What are the steps in Impairment Testing for Intangible Assets (not goodwill) under GAAP?

Answer 4

Step 1 Recoverability Test: Compare CV to undiscounted cash flows. If CV> undiscounted CF then it’s Impaired
Step 2 Calculate Impairment: CV-FV= Impairment (This amount is recorded as aloss as a component of income from continuing ops) I in IDEA.

Question 5

F2. What are the steps in Impairment Testing for Intangible Assets (not goodwill) under IFRS?

Answer 5

Impairment= Reoverable amount - Carrying Value

It’s the excess of the carrying value if an intangible asset over it’s recoverable amount.

Question 6

F2. What is the Intangible Asset Revaluation Model carrying value formula?

Answer 6

Fair Value on revaluation date - Subsequent amortization - Subsequent impairment.

Question 7

F2. What is the amortization formula for Goodwill with an impairment?

Answer 7

Adjusted CV (CV-loss on impairment) / Useful life= Amortiazation

Question 8

F2. What is the Partial Goodwill formula for non controlling interest under IFRS?

Answer 8

FV of sub’s assets (includes BV + any FV adustments + any identifiable intangibles) x non controlling int. %

Question 9

F2. What is the Partial Goodwill formula for Consolidations under IFRS?

Answer 9

Goodwill = Acquisition costs - FV of net assets acquired (includes BV + any FV adustments + any identifiable intangibles) x % acquired.

Question 10

F2. What is the Full Goodwill method for Consolidations under GAAP?

Answer 10

FV of Subsidiary (FV x %= $) - Net identifiable assets - FV adjustments