Delaware law permits dividends to be declared out of (i) a company’s surplus, as defined and in accordance with Delaware law; or (ii) if there is no surplus, out of the company’s net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year (sometimes called nimble dividends). See 8 Del. C. § 170(a). Dividends may not be declared and paid out of net profits if the capital of the company, computed in accordance with Delaware law, “shall have been diminished by depreciation in the value of its property, or by losses, or otherwise to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets” until …show more content…
In order to complete the surplus test, a company must determine the value of its net assets. Delaware law does not prescribe a method for such valuation, and while there is generally a book value for a company’s net assets based on generally accepted accounting principles, the book value does not necessarily reflect the current market value of assets and liabilities. Delaware courts have recognized this conflict and have held that a board may determine their assets’ current value when determining whether the surplus test has been satisfied. See Morris v. Standard Gas & Elec. Co., 63 A. 2d 577, 578 (1949). Absent fraud or bad faith, as long as the Board demonstrates “great care to obtain data” and exercises “informed judgment”, a court will generally not interfere with such valuation. Id. Directors do not need to obtain a formal appraisal to arrive at the valuation, but must “evaluate the assets on the basis of acceptable data and by standards which they are entitled to believe reasonably reflect present values.” See Klang v. Smith’s Food & Drug Centers, Inc., 702 A. 2d 150, 152 (Del. 1997). Therefore, intangible assets (e.g., goodwill) can play a critical role in determining whether a company passes the surplus test. For example, a board could reasonably determine that a company that would otherwise fail the surplus test based on the value of its assets reflected on its balance sheet has surplus by attributing additional value to its intangible
The book, Celebrated Cases of Judge Dee (Dee Goong An), takes place in China, during the Tang dynasty. The Tang dynasty took place from 618-907 CE and included both Confucian and Legalist influences. Located in the Province of Shantung, is the town district called Chang-Ping, where Dee Goong An served as the town 's magistrate. A magistrate is a judge, detective, and peacekeeper who captures criminals and is responsible for their punishments. The people of China looked at magistrates as the "mother and father" of their town. Magistrates received a large amount of respect from the people due to the amount of authority and power they had. With so many people relying on him to make their home
McOskar Enterprises, Inc. owns and manages a health and fitness center identified as “Curves for Women”. Tammey J. Anderson, the complainant, joined Curves on April 2, 2003. As part of the joining process Anderson signed a release of liability agreement. This agreement released Curves from any liabilities related to injuries that might be sustained by contributing in any activities or through the use of equipment. The agreement also stated that participants agreed to all risks of death or injury that could occur, Anderson read and signed the agreement of terms with Curves. After completing the liability agreement, Anderson began working out under the observation of a Curves’ trainer using the machines within the facility. During the workout Anderson notified the trainer that she began to feel pain in her neck, shoulder and arm, but finished her workout. She continued to feel the pain when she got home and pursued medical attention. As part of her prescribed medical treatment she was sent for a course a physical therapy. In June 2003 Anderson underwent a cervical discectomy, a procedure used to treat nerve or spinal cord compression. After her procedure Anderson sued Curves, claiming negligent acts during her workout. Anderson v. McOskar Enterprises, Inc., 712 NW 2d 796 (Minn. 2006).
B) assets are generally listed on the balance sheet at their historical cost, not their current value.
Clear and Danger was evaluated in the First Amendment and guarantees the right of Freedom of Speech. I have two scenarios regarding clear and danger, the first scenario is Debs v United States. In this case Debs v United States, Debs felt that socialism is the answer; however, Deb’s was prosecuted for the remarks that he made. In addition, the speech that Deb gave wasn’t as harsh as made by others, for example, George McGovern made a remark about the Viet Nam War during his 1972 presidential bid which was very harsh. This process was done by using its weak form of the clear-and-present-danger test and Deb’s ended up being sentenced to a ten year sentence. In this case Deb’s couldn’t speak everything on his mind that he wanted which was a violation
A strong balance sheet gives an investor an idea of how financially stable the company really is. Many professionals consider the top line, or cash, the most important item on a company’s balance sheet. The big three categories on any balance sheet are “assets, liabilities, and shareholder equity.” Evaluating Barnes & Noble’s assets for the time 2014 at $3,537,449, 2013 at $3,732,536 and 2012 at $3,774,699, the company’s performance summarizes that it is remaining stable. These numbers reflect a steady rate over the three year period. Like assets, liabilities are current or noncurrent. Current liabilities are obligations due within a year. Key investors look for companies with fewer liabilities than assets. Analyzing this type of important information, informs a potential investor that if the company owes more money than they are bringing in that this company is in financial trouble. Assessing the liabilities of the balance sheet, for the same time period, it is also consistent with the assets. The cash flow demonstrates a stable performance in the company’s assets and would be determined that the liabilities of this company are also stable. Equity is equal to assets minus liabilities, and it represents how much the company’s shareholders actually have a claim to. Investors customarily observe closely
Nearly every aspect of law enforcement has a court decision that governs criteria. Most court rulings are the result of civil lawsuit towards a police officer and agency. However, currently, there is no law that mandates law enforcement driver training. When it comes to firearms, negligence by officers has resulted in a multitude of court rulings. Popow v. City of Margate, 1979, is a particularly interesting case that outlines failed firearms training by an agency. In this case, an officer chasing a suspect during a foot pursuit fired at the suspect, striking and killing an innocent bystander (Justia.com, 2017). The court ruled that the agency was “grossly negligent” of “failure to train” (Justia.com, 2017). As a result, nearly every agency requires annual firearms training and has written policy concerning the same. Officers must show proficiency in firearms use every year to maintain their certification. Many states even impose fines on officers for
Delaware offers a great variety of foods and things to try. From soybeans, to corn, to a lot of chicken, and plenty of crab, there is so much to taste! Definitely do not forget the great food festivals too. There is also a wide variety of heritages, and all four seasons can be experienced there. Even Delaware’s wacky laws, such as the law stating that “no person shall pretend to sleep on a bench on the boardwalk” (Dumb Laws: Stupid Laws: We have Weird Laws, Strange Laws, and Just plain Crazy Laws!), make it an interesting place. All this is how Delaware gets its most recent nickname, small wonder, from how such a small state can have so many wonders.
The directors need to be able to view the financial performance of the group in order to make relevant and informed decisions. In order to obtain this information the correct procedures, as mentioned, must be followed to ensure that assets are not overstated and liabilities
... show that the company is growing and expanding, property and inventory, as a percentage of assets, should be increasing instead of decreasing. More property and inventory, if it is not owned by creditors, would also decrease their debt to total assets ratio.
The offence Harry would be charged with is William’s murder. The area of Law that this case is concerned with is criminal law (homicide). The two offences that constitute homicide are murder and manslaughter. The classic definition of murder was set by Sir Edward Coke (Institutes of the Laws of England, 1797). Murder is defined by the Law as causing the death of a human being within the Queen’s peace with the intention to kill or cause grievous bodily harm. It comprises of 2 elements. These are the actus reus (guilty act) and the mens rea (intention).
The FAS has made changes throughout the years in the way to account for goodwill. Goodwill is when a company attempts to merge with another company to obtain the valuable intangible assets. These assets are anything that can 't be seen or touched. Valuable intangibles can be anything like a company name because it is well known. Many times companies will decide to merge because it can be beneficial to them to merge with well-known entities. This can also be less costly and less time-consuming versus building a brand new business on its own. On many occasions, gooodwill is amortized on accounting records. Amortization is not the most favorable approach for companies who are trying to attract investors. This because when amortization is not present in the books, it means that there aren 't high physical cash profits for shareholders.
From an accountant's perspective, goodwill appears in accounts of a company only when the company has purchased some intangible and valuable economic source. Intangibles such as patents and copyrights are examples of identifiable intangible assets. On the other hand, intangibles such as favorable government regulations, outstanding credit ratings, superior management and good labor relations are examples of unidentifiable intangible assets (Tweedie, 27). Goodwill comprises the complete set of unidentifiable intangible assets held by the reporting entity. Generally, goodwill has appeared to be an umbrella concept embracing many features of a company's activities that could lead to superior earning power, such as excellent management, an outstanding workforce, effective advertising and market penetration.
Lange, Fornaro, and Buttermilch (2015) focused their research on the FASB Accounting Standards Update (ASU) 2011-08, in regards to Intangibles – Goodwill and Other: Testing Goodwill for Impairment. The authors elaborated on how reporting has been done in the past and how the changes made for private companies has helped ease the financial reporting of goodwill. In addition, the authors discussed the definition of a public business entity. This helps to allow private companies to determine the proper way to report their financial
By its very nature of being difficult, or in some cases impossible to identify, non-purchased goodwill is unable to be included on the balance sheet.
If there is sufficient working capital than we can assume that it has sound financial position and if the business is under trading than there will be increment in liquid assets which shows that the funds are not been utilized and kept ideal.