Answer Happy

1. Boeing and Airbus both make airplanes --- identify which
accounting standards each one uses. Then explain how each one
accounts for plane development costs. Then explain the impact on
the income statement and whether we can compare them on an equal
basis. Using actual numbers may make it clearer to understand.
2. If a company buys another company they allocate the
purchase price 1st to tangible assets and then to identifiable
intangibles and then to goodwill. There have been a significant
number of acquisitions over the past few years that created a
massive amount of intangibles and goodwill on corporate balance
sheets. A couple of years after acquisition we have seen companies
write off large amount of intangibles and goodwill. A couple of
examples are Kraft Heinz, Baker Hughes, and ATT -- take one of them
identify the write off , the amount of write-off. Provide 3
reasons they needed to perform the write down. What may that
tell us about the original purchase price?