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On January 1, 2016 Penn acquired 100% of Teller. The transaction was not a bargain purchase....

On January 1, 2016 Penn acquired 100% of Teller. The transaction was not a bargain purchase. On the acquisition date, it was determined that Teller had internally-generated patents with a fair value of $36,327,090 that had not been recorded on its financial statements, in accordance with GAAP. The patents were estimated to have a remaining useful life of 15 years as of the acquisition date.  

What amount should be reported on Teller's consolidated financial statements as of 12/31/2021 for these patents?

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Answer #1

Answer:

Since the fair value of patents is $36,327,090 and the valuable life is 15 years. The equivalent needs to written off over the valuable existence of the asset on a straight line premise.

Subsequently, Amortization amount per year is $36,327,090/15 years = $ 24,21,806

On 12/31/2021 (6 years has been finished since Penn obtained Teller). In this manner the value of patents to be accounted for on Teller's consolidated financial statements as on 12/31/2021 would be $36,327,090 (- ) $36,327,090 * 6/15 = $36,327,090 - $ 14,530,836 = $ 21,796,254.

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