9/12 Chapter 3

Question 1

Goodwill

Answer 1

Net Asset carry value
FV Net Assets(appraised)
Unit/Enterprise FV(valuation of future cash flows)
Compare the unit FV to the CV
If the UFV is > the carrying value no impairment
If the UF<CV = go
Compare the FVA to CV
Debit Goodwill Impair
Credit      Goodwill

Question 2

Direct control

Answer 2

when one company owns a majority of another company’s common stock

Question 3

Indirect control

Answer 3

when a company’s common stock is owned by one or more companies under the control of one company

Question 4

fiscal periods

Answer 4

we take the parents year end and change the subs year end
or we adjust the date of the sub each period to place the data on a basis consistent with the fiscal period of the parent