Metro Inc. owns and operates a network of 566 supermarkets and pharmacies in Quebec and Ontario under the Metro, MetroPlus, Super C, Food Basics, Adonis, Brunet, and Pharmacy and Drug Basics banners. Exhibit 8-19 shows Metro’s notes on significant accounting policies for intangible assets and goodwill accompanying its 2013 financial statements. Required: a. What major intangible assets does Metro own? Why does the company distinguish between the ones with definite lives and those with indefinite lives? b. What method does Metro use to amortize its intangible assets? Are they amortized over their legal lives or useful lives? Explain why the treatment is appropriate. c. Explain what the prescription files are. How are these related to Metro’s major operations? d. What is the source of the goodwill that Metro recognizes? Is the goodwill amortized? Explain how Metro determines and recognizes any impairment loss on the goodwill.
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