F2F Assignment

Face-to-face hand-in #4

Due: Session 4

Topic: Capital Assets

In this face-to-face we will consider the implication of information about capital assets on the financial statements. Parts 1 & 2 will use the financial statements of Nestlé Group, which are posted in the Face-to-Face folder on the Blackboard content page.

The questions, in three parts, are on the next pages.

Submission Requirements

* You must hand in your face-to-face submissions at the beginning of the class. TAs will pick up the submissions within five to ten minutes of the start of class. If you arrive after the TA has picked up the assignment or after 10 minutes after the start of class (whichever occurs first), you won’t be able to hand it in and you will receive a zero for that assignment.

* You have to hand in your face-to-face assignment in the section you’re registered in.

* Face-to-face assignments must be typed and stapled

Face-to-face hand-in #4

Capital Assets

PART 1

For this part of the Face-to-Face you’ll use Nestlé Group’s 2012 consolidated financial statements and the 2012 Annual Report. You’ll find these documents on the Blackboard content page under the Face-to-Face tab.

1. How does Nestlé account for research it does internally? Charged to the income statement in the year incurred.

2. How much goodwill does Nestlé report on December 31, 2012? What is goodwill?

32,615M CHF (net). Represents excess of what a company pays for a subsidiary over the fair value of the identifiable assets and liabilities. In Nestle’s case, the four largest categories of goodwill relate to the following acquisitions: Wyeth Nutrition, PetCare, Gerber and the company’s Ice cream businesses.

3. What is Nestlé’s largest category of intangible assets? Brands & Intellectual Property Rights

a. How much of that category has an indefinite useful life? What’s the difference in how intangible assets with indefinite and identifiable useful lives are accounted...