Impact of GAAP rules on the comparability of LinkedIn income over time.

LinkedIn's September 30, 2016, Form 10-Q balance sheet data reported certain items very differently from the way that Microsoft allocated its purchase price to LinkedIn's assets and liabilities as of December 6, 2016.

Compare intangible assets, as reported as of September 30 and December 6. What is the difference in amount, and why do you think this occurred?

Microsoft's Accounting for the Purchase of LinkedIn A key accounting decision is how to allocate the purchase price, which in this case was approximately $27 billion. Microsoft's 2018 Form 10-K indicates it allocated $16,803 million of the purchase price to goodwill, and another $7,887 million to intangible assets. The values and lives of the major intangible assets acquired were as follows: Type $ (millions) Life Customer-related $3,607 7 years Marketing-related (trade names) 2,148 20 years Technology-based 2,109 3 years Contract-based 5 years Totals 7,887 9 years on average LINKEDIN CORPORATION TRENDED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) As of September 30, 2015 December 31, 2015 March 31, 2016 June 30, 2016 September 30, 2016 $ 2 2 CO 726 ASSETS CURRENT ASSETS: Cash and cash equivalents Marketable securities Accounts receivable Deferred commissions Prepaid expenses Other current assets Total current assets Property and equipment, net Goodwill Intangible assets, net Other assets TOTAL ASSETS 631,725 $ 2,457,607 457,975 56,453 72,752 136,225 3,812,737 906,189 1,508,946 418,050 70,788 6,716,710 $ 546,237 $ ,573,145 603,060 87,706 62,992 61,949 3,935,089 1,047,005 1,507,093 373,087 148,925 7,011,199 $ 759,451 $ 2,400,187 582,726 80,783 76,414 68,835 3,968,396 1,139,032 ,597,268 3 34,048 1 70,623 7,209,367 $ 719,807 $ ,591,709 560,440 78,353 76,478 78,046 4,104,833 1,228,402 1,597,423 295,942 84,840 7,311,440 $ 697,113 2,667,883 541,325 72,290 79,104 45,298 4,103,013 1,508,480 1,609,492 262,986 72,441 7,556,412 1 $ Microsoft's Accounting for the Purchase of LinkedIn A key accounting decision is how to allocate the purchase price, which in this case was approximately $27 billion. Microsoft's 2018 Form 10-K indicates it allocated $16,803 million of the purchase price to goodwill, and another $7,887 million to intangible assets. The values and lives of the major intangible assets acquired were as follows: Type $ (millions) Life Customer-related $3,607 7 years Marketing-related (trade names) 2,148 20 years Technology-based 2,109 3 years Contract-based 5 years Totals 7,887 9 years on average LINKEDIN CORPORATION TRENDED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) As of September 30, 2015 December 31, 2015 March 31, 2016 June 30, 2016 September 30, 2016 $ 2 2 CO 726 ASSETS CURRENT ASSETS: Cash and cash equivalents Marketable securities Accounts receivable Deferred commissions Prepaid expenses Other current assets Total current assets Property and equipment, net Goodwill Intangible assets, net Other assets TOTAL ASSETS 631,725 $ 2,457,607 457,975 56,453 72,752 136,225 3,812,737 906,189 1,508,946 418,050 70,788 6,716,710 $ 546,237 $ ,573,145 603,060 87,706 62,992 61,949 3,935,089 1,047,005 1,507,093 373,087 148,925 7,011,199 $ 759,451 $ 2,400,187 582,726 80,783 76,414 68,835 3,968,396 1,139,032 ,597,268 3 34,048 1 70,623 7,209,367 $ 719,807 $ ,591,709 560,440 78,353 76,478 78,046 4,104,833 1,228,402 1,597,423 295,942 84,840 7,311,440 $ 697,113 2,667,883 541,325 72,290 79,104 45,298 4,103,013 1,508,480 1,609,492 262,986 72,441 7,556,412 1 $