Reference no: EM132497297

Question - Mikkeli OY acquired a brand name with an indefinite life in 2015 for 43,200 markkas. At December 31, 2017, the brand name could be sold for 35,200 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 45,500 markkas, and the present value of this amount is 34,200 markkas. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: Prepare journal entries for this brand name for the year ending December 31, 2017, under (1) IFRS and (2) U.S. GAAP. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2017 and December 31, 2018 conversion worksheet to convert IFRS balances to U.S. GAAP.

A) 1. Record the entry for the loss on impairment of brand as per IFRS.

2. Record the entry for the loss on impairment of brand as per U.S. GAAP.

B) 1. Record the conversion entry needed for 12/31/17.

2. Record the conversion entry needed for 12/31/18.