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):

	Book Value	Fair Value
Current assets	$400	$300
Plant and equipment	12,000	4,000
Licenses and trademarks	5,000	7,000
Total assets	$17,400
Current liabilities	$800	800
Long-term liabilities	10,000	11,000
Capital stock	8,000
Retained earnings	(1,400)
Total liabilities and equity	$17,400

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:

(in thousands)	Fair Value
Customer contracts	$1,000
Assembled workforce	20,000
Brand names	5,000
Leases at rents below current market	400
Developed technology	1,500
In-process research and development	300
Future cost savings from elimination of duplicate assets	800
Additional expected revenues from bundling products	600

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.