a. Though NDS is not a separate company, it’s a business and Microsoft is the primary beneficiary of this business. Microsoft acquired “substantially all” of NDS, in the other word, Microsoft had control over NDS and it bought both NDS’ assets and liabilities. According to ASC Paragraph 805-10-25-01, this transaction qualifies as a business combination. Hence Microsoft should apply acquisition method.
b. Assets and liabilities reported as business combination and purchase can have substantial differences on acquirer’s financial statements. For instance, when Microsoft acquired NDS, it will be able to report some intangible assets. Examples would be technology-based, contract-based, customer-related and marketing-related. Those are identifiable intangible assets that are not reported on the book before and benefit for future development of the Microsoft. In additional, Goodwill is reported when NDS was acquired. Microsoft paid consideration over NDS’s book value, because it expected the acquisition would bring synergies to the company.
a. Phone Hardware segment’s goodwill was impaired.
b. In business perspective, Phone Hardware did not meet the expected sales goal, and lower the margins in total. The changes of marketplace competition are the economic reason for the goodwill impairment.
c. Microsoft must make judgments on estimation of the long-term rate of growth for the business, estimation of the useful life over Phone Hardware segment, and determination of weighted average cost of capital.
d. Technology-based and contract-based is major identifiable intangible assets of the Phone Hardware segment.
Each of these intangible assets has different useful lives. It’s necessary to estimate their fair value to calculate their ...
... middle of paper ...
...p growing in next few years. Therefore, Danske always mentions “net profit before goodwill impairments”, they do not want 2015’s uncertain assumptions impact their financial statements.
9. Danske prepares its financial statements in accordance with IFRS. Under US GAAP, AOCI is a part of balance sheet under stockholders’ equity section. However, under IFRS, Danske can report all of the comprehensive income components that are not reported in other statements under OCI, such as unrealized value adjustments, unrealized gain or loss of AFS
10. Foreign currency translation is used to adjust the difference of goodwill between functional currency and reporting currency after impairment charges. So that goodwill is able to react to rate changes. Foreign currency translation increases or decreases the goodwill balance to revise the carrying amount of goodwill to fair value.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- Microsoft Corporation a multinational company headquartered in Redmond, Washington, United States that licenses, manufactures, develops, and supports a wide range of products and services primarily related to computing through its various product divisions. Established on April 4, 1975 to develop and sell BASIC interpreters for the Altair 8800, Microsoft rose to dominate the home computer operating system market with MS-DOS in the mid-1980s, followed by the Microsoft Windows line of operating systems.... [tags: Microsoft, Operating system, Computer software]
2477 words (7.1 pages)
- One of Microsoft few mistakes was when they tried to take on Apple in the Mp3 market with their Zune. Things that went against Microsoft when they introduced the Zune was that the iPod had already been released so it was seen as a copycat product by Microsoft. Other things that went against the Zune was while Microsoft focused on the hardware of the device , the user interface ended up coming out terrible which in turn alienated customers who enjoyed the iPods user friendly interface. (Martin, 2012) Robbie Bach the former leader of the Microsoft home entertainment and mobile business gave an interview into why the Zune failed.... [tags: Apple Inc., Operating system, Macintosh, Microsoft]
890 words (2.5 pages)
- Introduction The reason that I have chosen to do this question is that I want to discover whether there is a viable solution for a company as large as Microsoft to increase their profit margins or if Microsoft 's size prevents them from further increasing their profits. It is important to find out as if there is a clear way to increase profits it may be possible for other similar firms to also increase their profits. Since Microsoft 's establishment in April 1975 they have grown into a monopoly within the technology market, bringing huge innovation to the technology market.... [tags: Operating system, Microsoft, Microsoft Windows]
1315 words (3.8 pages)
- I chose Microsoft Corporation because I grew up seeing it flourish into the company it is now. Microsoft has had a tremendous impact internationally and Bill Gates, the founder of Microsoft, has also had a major impact on several global issues. In my paper I am going to discuss the history, mission, values, products and services, competitors and how they share the market, a brief overview of the foreign investments and an evaluation of the company’s SWOT analysis. On September 22, 1994, Microsoft Corporation was established to be a technology company and go all the way back as far as 1975.... [tags: Microsoft, Microsoft Windows, Windows XP]
1568 words (4.5 pages)
- Table of Contents Executive Summary 2 Company Background 2 Company Research 3 Value Chain Analysis 3 Customer Profile 4 Competitors 4 External Analysis 5 Internal Analysis 7 Financials 8 Situation Analysis 8 Alternatives 9 Recommendation 11 Implementation 11 Contingency 12 Bibliography 14 Appendix 15 Executive Summary Microsoft has been a leader in the software industry for many years. As the technology industry has changed, so has the type of devices. This change has created a market with a focus on mobile devices and access to data through the cloud.... [tags: Microsoft SWOT Analysis]
3443 words (9.8 pages)
- The Face of Microsoft How you ever thought about the people who are the face of the company. Why are they the face of the company. What did they do to get this kind of image. Most of the time, a person who founded the company is the face of the company. What if there is more than one cofounder of the company. Then who is the face of the company. There cannot be multiple faces of the company. For example, Microsoft is one these companies that has more than one cofounder of the company. Nevertheless, Bill Gates is the face of the company, not Paul Allen.... [tags: Bill Gates, Microsoft]
1543 words (4.4 pages)
- 1. What are the three or four most important drivers of Microsoft’s business model over the past 10 to 15 years that have accounted for the company’s spectacular results. Microsoft’s mission of placing a “PC running Microsoft software on every desk and in every home” drove their overall strategy early on. Depending on the business segment within Microsoft, one would see in place very different business models as the strategy for each line of business could vary. In the operating system (OS) segment, Microsoft initially brought in an existing product and modified this (MS-DOS) to work with the Intel microprocessor, which were the “brains” of the IBM PC.... [tags: Microsoft Business Analysis ]
1915 words (5.5 pages)
- "Microsoft Corporation, is a multinational computer technology corporation with global annual revenue of US$44.28 billion and 71,553 employees in 102 countries as of July 2006. It develops, manufactures, licenses, and supports a wide range of software products for computing devices. Headquartered in Redmond, Washington, USA, its best selling products are the Microsoft Windows operating system and the Microsoft Office suite of productivity software, each of which has achieved near-ubiquity in the desktop computer market.... [tags: Business Analysis Microsoft]
843 words (2.4 pages)
- The Ethics of Microsoft’s Product Pricing Structure Introduction Microsoft, currently one of the world’s biggest and most influential software companies, was found in 1975 by William Gates and Paul Allen. It quickly positioned itself as a leader in the software community and due to the strength growth of its user base for the Windows operating system and numerous other products, it became both widely popular and widely hated. Many consumers love the suite of products that Microsoft offers because they are easy to use, are widely supported, and have many applications written specifically to for them.... [tags: Microsoft Business Economics Essays]
3400 words (9.7 pages)
- Microsoft Microsoft continues its domination of the system software market thanks to the launch of Vista OS. But the rest are girding up as well Shashwat DC The Giant from Redmond might be under some pressure across the advanced markets due to a variety of reasons ranging from anti-trust to free software; nonetheless it continues to rule the Indian software market. Though there was a single percent drop in Microsofts market share, much like last year, it continues to command more than double of all Linux strains put together.... [tags: Software Microsoft Market Leader]
1351 words (3.9 pages)