Synopsis (summary)

INTRODUCTION
 1. News Corp

The company has a significant amount of intangible assets.

a) Types of intangible assets:

a) goodwill,
b) film and television libraries,
c) Federal Communications Commission (FCC) licenses,
d) newspaper mastheads,
e) distribution networks,
f) publishing rights and other copyright products and trademarks

b) Information provided on intangibles

c) Any explanation on valuation/ measurement or recognition
Intangible assets acquired in business combinations are recorded at their estimate fair value at the date
of acquisition. Goodwill is recorded as the difference between the cost of acquiring entities and
amounts assigned to their tangible and identifiable intangible net assets. For all of its television station
acquisitions through June 30, 2005, the Company utilized the residual method to estimate the fair
value of the stations FCC licenses. Under the residual method, a portion of a stations purchase price is
allocated to its tangible net assets and certain identifiable intangible assets in accordance with
independent third party appraisals with any remaining excess purchase price allocated to the FCC
license.

The Company follows SFAS No. 142, Goodwill and Other Intangible Assets, which requires that
Equity method definite-lived intangibles be amortized over their estimated useful life while indefinite-
lived intangibles and goodwill are not amortized.

d) Dollar value of intangibles

Types of Intangible Assets and its

Value in Balance Sheet
Intangible 12517
Goodwill 10944
Total 23461

Segment Division of Intangible

Assets and Goodwill
Filmed Entertainment 249
Television 11567
Cable Network Programming 3754
Direct Broadcast Satellite Television 537
 Magazines & Inserts 1002
Newspapers 1724
Book Publishing 501
Other 4127
Total 23461

e) Intangible as a percentage of total assets/ or as a percentage of net assets

(Ratios e.g. intangibles to net assets or intangibles to total assets)

Total value of Intangibles Assets = 23461

Total Assets = 54692
Net Assets (also called shareholders equity) = 29377

Ratios

1. Intangibles to net assets = intangibles / net assets

= 23461 / 29377
= 0.7986
OR
= 79.86%

2. intangibles to total assets = intangibles / total assets

= 23461 / 54692
= 0.42896
OR
= 42.9%

g) Comparison of one company with another

h) How well the companies have disclosed the information
 2. Telstra

a) Types of intangibles:
1) goodwill,
2) identifiable intangible assets
patents, trademarks and licenses
brand names
customer bases
mastheads

3) others
R &D
Deferred mobile handset subsidies
Deferred expenditure
Software assets developed for internal use

b) Information provided on intangibles

c) Any explanation on valuation/ measurement or recognition

Telstra calculate the amount of goodwill as at the date of purchasing their ownership interest in the
entity. Goodwill is amortised on a straight line basis over the period of expected benefit or maximum
of 20 years whichever is minimum from the date of control. The carrying amount of goodwill is
reviewed every six months and adjusted to the extent of future benefits are not considered probable.

Identifiable intangible assets

a) Patents, trademarks, licences, brand names and customer bases
Telstras identifiable intangible assets include patents, trademarks and licences (including network and
business software and spectrum licences), brand names and customer bases. When the costs these
identifiable intangible assets benefits for more than one accounting period then these costs are deferred
and amortised on a straight line method over the period of expected benefit.

b) Mastheads
Mastheads, being the titles of newspapers and magazines, are recognised as an identifiable intangible
asset at the fair value determined at the date of acquisition. It is also considered to be an identifiable
intangible asset. Mastheads have been assumed to have indefinite useful life.
d) Dollar value of intangibles

Types of Intangible Assets and its

Value in Balance Sheet
Goodwill 2287
Other 1581
Total 7261

Other Intangible Assets

Mastheads 447
Patents, trademarks and licenses 525
Brand names 170
Customer bases 439
Total 1581

e) Intangible as a percentage of total assets/ or as a percentage of net

assets (Ratios e.g. intangibles to net assets or intangibles to total
assets)
Total value of Intangibles Assets = 7261
Total Assets = 36310
Net Assets (also called shareholders equity) = 14881

Ratios

1. Intangibles to net assets = intangibles / net assets

= 7261 / 14881
= 0.4879
OR
= 48.79%

2. intangibles to total assets = intangibles / total assets

= 7261 / 36310
= 0.1999
OR
= 19.99%

f) Comparison of one company with another

g) How well the companies have disclosed the information

3. Alcoa

a) Types of intangible assets:

I. Goodwill
II. Computer software
III. Patents and licenses
IV. Other
V. Indefinite-lived trade names and trademarks

b) Information provided on intangibles

c) Any explanation on valuation/ measurement or recognition

Goodwill and Other Intangible Assets. Goodwill and intangibles with indefinite useful lives are not
amortized. Intangible assets with finite useful lives are amortized generally on a straight-line basis over
the periods benefited, with a weighted average useful life of 13 years. Goodwill and indefinite-lived
intangible assets are tested annually for impairment and whenever events or circumstances change,
such as a significant adverse change in business climate or the decision to sell a business, that would
make it more likely than not that an impairment may have occurred. If the carrying value of goodwill
or an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized. The
evaluation of impairment involves comparing the current fair value of each of the reporting units to the
recorded value, including goodwill. Alcoa uses a discounted cash flow model (DCF model) to
determine the current fair value of its reporting units. A number of significant assumptions and
estimates are involved in the application of the DCF model to forecast operating cash flows, including
markets and market share, sales volumes and prices, costs to produce, and working capital changes.
Management considers historical experience and all available information at the time the fair values of
its reporting units are estimated. However, fair values that could be realized in an actual transaction
may differ from those used to evaluate the impairment of goodwill. See Note E for additional
information.

d) Dollar value of intangibles

Types of Intangible Assets and its

Value in Balance Sheet
Goodwill 6249
Other Assets 1012
Total 7261

Other Intangible Assets

Computer Software 771
Patents and licenses 155
Other intangibles 367
Total amortizable intangible assets 1293

Indefinite-lived trade names & trademarks 166

Total 1459

e) Intangible as a percentage of total assets/ or as a percentage of net assets

(Ratios e.g. intangibles to net assets or intangibles to total assets)

Total value of Intangibles Assets = 7261

Total Assets = 33696
Net Assets (also called shareholders equity) = 13373

Ratios

3. Intangibles to net assets = intangibles / net assets

= 7261 / 13373
= 0.5429
OR
= 54.29%
4. intangibles to total assets = intangibles / total assets
= 7261 / 33696
= 0.2154
OR
= 21.54%

f) Comparison of one company with another

g) How well the companies have disclosed the information