Research Report (ACCT421)
Partnership & Consolidation
Note:
1) There are TWO cases in the Research Report. You need to complete both cases to get the full points.
2) Length of the report: 4 ~ 6 pages for both cases in total (NOT 4~6 pages for each case). You can include the
cover page, the abstract page, and/or the reference page in your report. However, only one of those pages
can be counted as the total pages.
3) Format: Word or PDF, fond 12, double space, with 1-inch margin each side.
4) You are welcome to cite some sentences/opinion from the publication in your report but remember to cite
them in a correct way, e.g., APA 5th.
5) More details of the research report can be found at the end of the course syllabus.
Case I:
A local law firm has eleven lawyers. One Lawyer has been sued for several million dollars as the results of a recent case.
Because of what appears to be the lawyer’s very poor judgment, one of the customers died. Although the lawyer was
solely involved with the customer in question, the lawsuit names the entire law firm as a defendant. Originally, six of the
lawyers formed the law firm as a general partnership. However, three years ago, the partners converted the business to a
limited liability partnership based on the laws of the state in which they operate.
Instruction:
Read the articles online or any published information that is available on partners and partnership liability, based on the
facts presented in this case, please present (in complete sentences instead of listing the key words) your opinion/comments
on the possible liability the other ten partners in this law firm may have in connection with the case. In addition, please
present, in your opinion, the factors which may be important in determining the exact liability (if any) of the other ten
lawyers.
Case II:
P Co. recently acquired S Co. The combined firm consists of three related businesses that will serve as reporting units. In
connection with the acquisition, P requests your help with the following assets evaluation and allocation issues. By using
what you have learned in this course and with references to FASB ASC as appropriate.
P recognizes several identifiable intangibles from its acquisition of S. It expresses the desire to have these intangible
assets written down to zero in the acquisition method.
The price P paid for S indicates that it paid a large amount of goodwill. However, P worries that a future goodwill
impairment may send the wrong signal to the investors about the wisdom of the acquisition S. P thus wishes to allocate
the combined goodwill of its reporting units to one account called Enterprise Goodwill. In this way, P hopes to minimize
the possibility of goodwill impairment because of a decline in goodwill in one business unit could be offset by an increase
in the value of goodwill in another business unit.
Instruction:
1. Please advise P about the acceptability in its immediate write-off its identifiable intangibles.
2. Indicate the relate factors to consider in allocating the value assigned to identifiable intangibles acquired in a
business combination to expense over time.
3. Advice P on the acceptability of its suggested treatment of goodwill.
4. Indicate the relative factors to consider in allocating goodwill across an enterprise’s business units.