Reference no: EM133183611
Question - Brightcove, Inc. acquires Ciber, Inc. for $50 million in cash and accounts for the acquisition as a merger. Ciber's balance sheet at the date of acquisition is as follows (in thousands):
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Book Value
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Fair Value
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Current assets
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$400
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$300
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Plant and equipment
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12,000
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4,000
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Licenses and trademarks
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5,000
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7,000
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Total assets
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$17,400
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Current liabilities
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$800
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800
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Long-term liabilities
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10,000
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11,000
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Capital stock
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8,000
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Retained earnings
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(1,400)
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Total liabilities and equity
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$17,400
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Brightcove hires a consultant to identify and value any previously unreported intangible assets attributable to Ciber at the date of acquisition. The consultant identifies the following intangibles:
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(in thousands)
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Fair Value
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Customer contracts
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$1,000
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Assembled workforce
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20,000
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Brand names
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5,000
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Leases at rents below current market
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400
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Developed technology
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1,500
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In-process research and development
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300
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Future cost savings from elimination of duplicate assets
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800
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Additional expected revenues from bundling products
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600
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Required -
a. Identify which of the above intangible assets meet the criteria for recognition as identifiable intangibles per ASC Topic 805. Which of the following includes all the assets that meet the criteria?
Customer contracts, Assembled workforce, Brand names, Developed technology, and In-process R&D
Customer contracts, Brand names, Favorable leases, Developed technology, and In-process R&D
Customer contracts, Brand names, Developed technology, In-process R&D, and Additional expected revenues
Customer contracts, Brand names, Favorable leases, Developed technology, and Future cost savings from duplicate assets
b. Calculate the goodwill to be reported for this acquisition.
c. Prepare the journal entry Brightcove makes to record the acquisition.
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