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Intangible Asset

Marisse wrote on Sat, 14 March 2009 19:51
I have a question.. Very Happy

Ano po ba ang GOODWILLKung hindi siya Intangible Asset?
Kasi sabi sa IA, dapat identifiable, pero hindi naman identifiable ang GW diba?
And yung sa previous quiz namin, hiwalay yung tanong sa IA at GW,
Example: What is the INTABGIBE ASSET and GOODWILL of the Company?
Thanks in advance! Very Happy

(paliwanag ko muna kung ano ang intangible assets then konek ko sa Goodwill ah)

Goodwill and Intangible Assets explained

Intangible Assets, must possess all three qualities or characteristics
(a) Identifiability
(b) Control
(c) Future Economic Benefits

Paliwanag natin isa isa.

unahin natin ang Control. Ang IA ay consdired as having “control” if the owner of such Intangible Asset has a “Control” over the flow of future economic benefits and limit the access of others to it. Parang Copyright ng mga authors at Trademarks ng mga iba’t ibang kumpanya. They impose ownership over a title or a product na sila lang ang maaring magbenta or magrender ng service.

Future Economic Benefits. Ang acquisition ng IA ay makakapagdala ng future economic benefits sa company. (self explanatory ito, hehe)

Identifiability. Ibig-sabihin nito, separable or transferrable ang asset na ito like some other assets. Meaning to say maaring ibenta nang siya lang.

ok, punta naman tayo sa Goodwill. Ano ba talaga ang goodwill. Goodwill is the excess of the fair value of the net assets over its book value through a purchase of an entity. Goodwill cannot be internally generated because it isnot an identifiable asset. It may only be recognized as an asset when an entity acquires another through purchase. Ok, in layman’s term ang Goodwill daw ay yung excess value ng kumpanya na willing bayaran ng bibili ng kumpanyang iyon over the book value.

Ok, ilagay natin sa isang situation. Si Juan gustong bilihin yung kumpanya ni Pedro na may pangalan na walangkamatayang ABC Company. Yung kumpanya ni Pedro nagkakahalaga lang ng P20(net assets). Pero, since alam ng lahat ng mga tao na ang kumpanya ni Pedro ay maganda dahil ito lamang ang nagbibigay ng pinaka-da-best na serbisyo sa lugar nila, willing si Juan na bilhin ang ABC company sa halagang P25.

So, yung excess na P5 na willing ibayad ni Juan ay ang tinatawag na Goodwill. Ito yung parang halaga ng “pangalan” ng kumpanya ni pedro sa komunidad.

Ok, sabihin na nating ibinenta na ni Pedro yung ABC Company kay Juan. So, may Goodwill na sya sa Asset portion ng Balance sheet nya. Puede ba ibenta ni Juan yung Goodwill na asset nya??? HINDI. Eh bakit? eh kasi nakatatak na sa pangalan ng ABC Company ang serbisyong totoo nila. Hindi nila puedeng ibenta ang pagkakakilala sa kanila ng tao na sila ang may pinakada-best na serbisyo sa kanila unless ibebenta nila yung buong kumpanya. Kaya ang GOODWILL ay INSEPARABLE, thus unidentifiable ang GOODWILL. kasi hindi mo puedeng ibenta ang pangalan mo lang separate sa’yo. Ikaw ba puede mo ibenta ang pagkakakilala sayo ng mga tao/reputasyon(unidentifiable asset)? Hindi naman diba? Pero pede mo ibenta ang atay, kidney, dugo, at ngipin mo (identifiable assets).

Kaya naman ang goodwill ay nag-aarise lang kapag inacquire ang kumpanya through purchase at hinding hindi puedeng gawing internally generated (meaning to say gagawa ang kumpanya ng sarili nilang goodwill) kasi nga since inseparable sya, hindi rin sya measurable. Nagiging measurable lang sya depende sa willing na presyong ibayad ng potential aqcuirer ng kumpanya.

Kaya naman ang presentation nya ay separate line item from Intangible assets ay sa kadalilanang hindi sya considred as intangible asset dahil wala syang characteristic na Identifiability.

Maglalagay ako ng excerpts as to what is a Goodwill para mas maintindihan nyo ang kung ano ang goodwill from a foreign-authored book (wag mag-alala kung US GAAP ito galing, halos pareho lang naman ang recognition at presentation ng Goodwill ng IAS at US GAAP saka definition at description lang naman ito ng kung ano ang goodwill so ok lang i-absorb)

Intermediate Accounting (16th ed) by Stice, Stice, & Skousen

GOODWILL – a residual number, the value of all the synergies of a functioning business that cannot be specifically identified with any other intangible factor, that is recognized ONLY when it is PURCHASED as part of the ACQUISITION of another company.

Goodwill represents the business contracts, reputation, functioning systems, staff camaraderie, and industry experience that make a business much more than just a collection of assets.

Goodwill is best thought of as a residual amount, the amount of the purchase price of a business that is left over all other tangible and intangible assets have been identified. As such, goodwill is that intangible something that makes the whole company worth more than its individual parts.

*kaya minsan basa basa rin kayo ng iba pang books na foreign authored kasi minsan maganda ang mga definition nila, as long as sure kayo na hindi in conflict yung part na yun with IAS/IFRS

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Categories: Intangible Asset
  1. ML
    December 6, 2009 at 2:02 am

    Hi Kuya Joseph. 3rd yr na po ako (from AMV), 1st subject ko sa MAS. Quiz na namin this week sa CVP Analysis kaya linubos-lubos ko na. Di ko kasi makuha yung sagot na nasa answer key at medyo nangangapa pa sa mga ganitong klaseng problem. Lifted to sa MAS quizzer ni Sir Larry Tan.

    Sari-Sari Grocery is currently open only on Mondays to Saturday. It is considering opening on Sundays. The annual incremental costs of Sunday opening are estimated at P124800. Its gross margin is 20%. It estimates that 60% of Sunday sales to customers would be on other days if its stores were not open on Sundays. The Sunday sales would be necessary for Sari-Sari to attain the same weekly operating income is ????? .
    30000
    Tonykinn Company is contemplating of marketing a new product. Fixed costs will be P800000 for production of 75000 units or less and P1200000 if production exceeds 75000 units. The variable cost ratio is 60% on the first 75000. Contribution margin will increase to 50% for units in excess of 75000. If the product is expected to sell for P25 per unit, how many units must Tonykinn sell at breakeven ?????

    111000

    A retail company determines its selling price by marking up variable costs 60%. In addition, the company uses frequent selling price markdowns to stimulate sales. If the mark-downs average 10%, what is the company’s contribution margin ratio ?????
    30.6%
    During 1996, RPS corporation supplied hospitals with a comprehensive diagnostic kit for P120. At a volume of 80000 kits, RPS has fixed costs of P1000000 and a profit before income taxes of P200000. Due to an adverse legal decision, RPS’s 1997 liability insurance increased by P1200000 over 1996. Assuming the volume and other costs are unchanged, what should the 1997 price be if RPs is to make the same P200000 profit before income taxes ?????
    135

  2. December 7, 2009 at 2:38 am

    ^^ Yung sagot po sa front page! Thanks! 🙂

  3. December 11, 2009 at 5:26 pm

    Tanong ko lang po dito kuya Joseph. If ang isang kompanya ay na acquire at halimbawang may goodwill sa acquisition let’s say P20,000 so sa books nila ay may entry na goodwill P20,000. Tapos etong kompanyang ito ay na reacquire na naman resulting to another goodwill of P40,000. So is it P60,000 na lahat ang goodwill or P40,000 lang?

  4. December 11, 2009 at 5:27 pm

    Mali ung pangalan…hehehe

  5. Analee R Montederamos
    February 21, 2010 at 1:54 am

    I just asking lang about the depreciation of fixed assets particularly the building. what is the maximum years of estimated life value ang building? can we depreciate it in 50 years estimated life value?

    • February 21, 2010 at 9:57 am

      Hi! Depreciation life depends upon the discretion of the management meaning to say, it is the management that decides how many years they would like to depreciate a certain asset (e.g. building). There’s is no minimum or maximum years that a building can be depreciated. It really depends on how many years the management thinks the asset will be used.

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