Discussion Questions

In 2015, Microsoft Corporation reported a $5.1 billion charge for the impairment of goodwill and a $2.2 billion charge for the impairment of intangible assets in one of its reporting units (segments) in its 10-K annual report. Referring to Microsoft’s 2015 financial statements and any other information from the media, address the following:

  • Microsoft’s segments serve as its reporting units for assessing goodwill for potential impairments. Which segment suffered a 2015 impairment? Describe the revenue model for this segment.
  • What were the underlying business reasons that required Microsoft to record a goodwill impairment in 2015?
  • How did Microsoft reflect the 2015 goodwill impairment in its income statement and cash flow statement?
  • Describe in your own words the goodwill impairment testing steps performed by Microsoft in 2015 and the consequent loss measurement
  • Part 2 

Discussion Questions

The FASB ASC paragraph 810-10-45-16 states, “The non-controlling interest shall be reported in the consolidated statement of financial position within equity, separately from the parent’s equity. That amount shall be clearly identified and labeled, for example, as non-controlling interest in subsidiaries.”

However, prior to issuing this current reporting requirement, the FASB considered several alternative display formats for the non-controlling interest. Access the pre-codification standard, SFAS 160, titled “Non-controlling Interest in Consolidated Financial Statements,” at the FASB (Links to an external site.) website to answer the following questions:

  • What alternative financial statement display formats did the FASB consider for the non-controlling interest?
  • What criteria did the FASB use to evaluate the desirability of each alternative?

In what specific ways did FASB Concept Statement 6 affect the FASB’s evaluation of these alternatives?

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