How Dell Technologies Accounts for Goodwill and Intangible Assets and Other Financial Information

Goodwill and Intangible Asset Accounting Treatment

1)How does Dell Technologies Inc. account for Goodwill and Other Intangible Assets? State the amounts of goodwill and other intangible assets as it appears in the financial statement  for the fiscal year ended January 31, 2020 and  the fiscal year ended January 31, 2019

2)Does Dell Technologies Inc. make any acquisitions during the fiscal year ended January 31, 2020? , and how these acquisitions affect the goodwill?

3)From the annual report for the fiscal year ended January 31, 2020 :

Determine the total amount of non-controlling interest 

State in which statement it is disclosed and in which section. 

State the amount of non-controlling interest share in Dell Technologies Inc.’s profit

State the amount of non-controlling interest share in Dell Technologies Inc.’s dividends .Explain. 

Discuss how Dell responded to the latest amendment issued by FASB to simplify the test for goodwill Impairment

1)Firms should conduct the impairment test for goodwill at least annually. Accounting standards require more frequent impairment testing if some events occurs.

a)Identify the main events upon which goodwill undergoes a test for its impairment. (7 marks)

Provide one recent example from the real world for a company that made the goodwill impairment test and reported goodwill impairment charges (Excluding Dell Technologies Inc.). 

2)Explain in details ,the differences between the IFRS and GAAP (after FASB issued ASU 2017-04 to simplify the accounting for goodwill impairment) regarding the following:

Assignment/allocation of goodwill. (i.e. The levels at which goodwill is assigned /allocated) 

Impairment of goodwill and test(s) applied and its steps (i.e. Methods of determining impairment of goodwill)

How impairment loss is recognized and allocated.(i.e. impairment loss[charge] calculation and allocation)

Amortization and impairment of intangible assets other than goodwill

Explain in details the differences between Merger, Consolidation, and Acquisitions. Support your answer with one recent example from the real world for each type. (Always give detailed information that would support you answer.)

2) If the accountant did not prepare the elimination entry of unrealized profit in inventories at the end of any year, this will affect the consolidated net income in that year and in all subsequent years". Discuss the accuracy of this statement and support your answer with a numerical example.

3) What is the difference between upstream sale of inventory and a downstream sale? Why is it important to know the direction of sale when preparing the consolidated financial statements?

On January 1, 2018, Panorama Company acquired 80% of Scann Corporation for $6,400,000.At the time of the acquisition, the book value of Scann's assets and liabilities was equal to the fair value except for equipment that was undervalued $80,000 with a four-year remaining useful life and inventories that were undervalued $20,000 and sold in 2018. Panorama separate net income in 2018 and 2019 was $1,100,000 and $1,150,000, respectively. Scann separate net income in 2018 and 2019 was $300,000 and $360,000, respectively. Dividend payments by Scann in 2018 and 2019 were $60,000 and $60,000, respectively

Required:  Using equity method,

1)Calculate Investment in Scann shown on Panorama's ledger at December 31, 2018 and 2019.

2)Calculate Investment in Scann shown on the consolidated statements at December 31, 2018 and 2019.

3)Calculate consolidated net income for 2018 and 2019.

4)Calculate Noncontrolling interest balance on Panorama's ledger at December 31, 2018 and 2019.

5)Calculate Noncontrolling interest balance on the consolidated statements at December 31, 2018 and 2019.

Dell Technologies Inc. is a multinational technology company that provides a range of products and services, including personal computers, servers, storage devices, and networking equipment. The company's financial statements reflect its accounting treatment of goodwill and other intangible assets.

Goodwill is an intangible asset that arises from the acquisition of another company, and it represents the difference between the price paid for the acquired company and the fair value of its net assets. Dell Technologies Inc. accounts for goodwill in accordance with the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) Topic 350, Intangibles—Goodwill and Other.

Under ASC 350, goodwill is initially recorded at its acquisition cost, which includes the purchase price and any other direct costs of the acquisition, such as legal fees and due diligence costs. After initial recognition, goodwill is not amortized, but is instead tested for impairment at least annually, or more frequently if events or circumstances indicate that impairment may have occurred.