Hi guys
I have a quesiton that i can not catch up the point of question.
here it is.
[question removed by admin]
When Tom said
"“The ratios you have provided for operating cash flow to operating income are overestimates to what they would have been if operating cash flows had been calculated on a pre tax and pre interest basis. ” did he mean that the “CFO calculation starting from EBIT(1-T) - WC + Dep” would have different result from the “CFO calcuation from NI+Dep-WC” ? Is it not ture if this is what he meant? One more ! as you can see on the answer sheet, the add-back from impairment were considerded, which is i don’t understand. On B/s, we sperated the license from intangible asse and put it into Asset held for sales. As long as they sperated, the reversal should increase the amont of asset held for sales, and it is sold, so that does not stay in intangible asset on B/S? If we calcuate the reversal part to reach the amount of intangible asset at the end of the year, is it double count(since it is sold to other party and so it is not our intangible asset) Note 12) Broadcast Licenses During 2014 the company successfully disposed of broadcast licenses that were held for sale for $37,900 (net book value of $23,500). Based on the successful completion of that sale the impairment losses taken in 2012 on other licenses have been reversed, restoring those intangible assets to their amortized historical cost. Broadcast licenses are amortized over a period of 15 - 25 years. Assets held for sale
______
23,500
Total current assets
131,300
131,400
Investments in associates
42,700
42,300
Capital assets, net
221,800
241,200
Intangible assets, net
43,250
24,500
Amortization of intangibles
7,250
anwer
Opening Intangible assets, net 24,500 +add back impairment loss reversal 12,500 +add new broadcast licenses from MM acquisition 5,500 +add brand name from MM acquisition 2,000 Capitalized customer acquisition cost :Solve for X X -deduct amortization expense (7,250) --------------------------------------------------------------- Ending Intangibles assets, net 43,250