ACC M115 Lecture Notes - Lecture 24: Financial Statement, Operating Lease, Finance Lease

• School: ACC
• Department: Accounting
• Course: ACC M115
• Professor: demers

Document Summary

Intangible assets are identifiable, non-monetary assets that do not have a visible physical existence, unlike land, buildings, or equipment. E. g. patents, copyrights, trademarks, other legal property. If the asset has a finite life, it is then amortised over the period during which the company believes the items will provide benefit. If it is not considered to have a finite life, an impairment test is carried out annually to determine if the value of the asset is to be written down. The cost of intangibles is determined in the same way as that of any other asset: purchase cost and other expenditures made prior to putting the asset into service. Internally generated brands, mastheads, customer lists and similar items cannot be capitalised (made an asset) and are therefore expenses. Intangibles are generally amortised using the straight-line basis. Goodwill arises when more is paid for a group of assets, such as a whole business, than the assets seem to be worth individually.