Description
Question:
View the 2015 Annual Report for the Ford Motor Company (download the PDF of the Annual Form 10-K report from the website), a Fortune 50 company. Using this report, answer the following questions: #34 What were the total debt and debt components at the end of 2015? #33 Do you think that the company has additional “intangibles” that are not recorded on the balance sheet? Why? How would this issue affect your understanding of the company’s financial performance? #31 What was the total amount of intangible assets that the company reported at the end of 2015, and how did the company capitalize and amortize the different intangible assets? #24 What were the reinvested (retained) earnings on December 31, 2015? Work has to be shown for #34.
http://corporate.ford.com/content/dam/corporate/en/investors/reports-and-filings/Annual%20Reports/2015-Annual-Report.pdf
Answer:
#34 What were the total debt and debt components at the end of 2015?
Ans:
Automotive debt (Note 13) $ 12,839
Financial Services debt (Note 13) $ 120,015
Debt variable interest entities (“VIEs”) $ 43,086
Automotive
Long-term debt $ 11,060
Debt payable within one year $ 1,779
Total $ 12,839
Financial Services
Long-term debt $ 120,015
Fair value of Automotive sector debt $ 14,199
Fair value of Financial Services sector debt $ 121,170
#33 Do you think that the company has additional “intangibles” that are not recorded on the balance sheet? Why? How would this issue affect your understanding of the company’s financial performance?
Ans:
Intangible assets are comprised primarily of license and advertising agreements, land rights, patents, customer contracts, and technology. Other intangibles as primarily customer contracts are not included in the intangible.
#31 What was the total amount of intangible assets that the company reported at the end of 2015, and how did the company capitalize and amortize the different intangible assets?
Ans:
The net carrying amount of the company’s intangible assets was $124 million at December 31, 2015 and are reported in other assets on our balance sheet. The company’s indefinite-lived intangibles were tested for impairment in 2015 and no impairment was required.
The company capitalize and amortize our finite-lived intangible assets over their estimated useful lives. Indefinite-lived intangible assets are not amortized, but are tested for impairment annually or more frequently if events or circumstances indicate the assets may be impaired.
#24 What were the reinvested (retained) earnings on December 31, 2015?
Ans:
Retained earnings of $5 billion related to full year 2015.
Steven_itern –
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