M & S : Goodwill And Computer Software Essay

1326 Words Nov 15th, 2016 6 Pages
To start with the intangible assets of M&S, the two main intangible assets of M&S are goodwill and computer software (Marks and Spencer, 2016). M&S have the joint venture partnerships with Lima (Bradford) S.à r.l. that share the Bradford distribution centre and the fair value of this derivative instruments was £2.0 million. M&S acquired the remain 50% share of Lima (Bradford) S.à r.l. on 29th of February in 2016, and this distribution centre has been fully transferred to M&S on that day. The result of this acquirement is the £6.2 million of goodwill recognition (Marks and Spencer, 2016).

As the result of this entity purchase, the distribution centre now fully belongs to M&S. After this transaction the lease agreement of the embedded derivative has been eliminated, M&S lost £21.7 million in the consolidated income statement (Marks and Spencer, 2016). As it mentioned above, the fair value movement of this embedded derivative was £2.0 million, however, the fair value measurement to seem to take the expected future revenues into account to increase the assets increase assets by taking into account expected future revenues, on the other hand, it is discounted the current values so the liabilities has been decreased (Biondi, 2011). In so doing, the agreement of the embedded derivative has been derecognized, therefore, there is £21.7 million loss after the acquirement. In sum, the fair value measurement aims to better relate the shareholder to variable quotations on…

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