ACCT 3021 Lecture : Chp 12 Notes With Ans
Document Summary
Chapter 12 intangible assets: intangible asset issues, types of intangibles, impairment of intangibles, research and development costs (time permitting, presentation of intangibles. Intangible asset issues: characteristics, they lack physical existence. (but has value: right or privilege, they are not financial instruments. (stks + bonds) Common types of intangibles: patents, copyrights, franchises or licenses, trademarks or trade names, goodwill, valuation. Purchased intangibles: recorded at cost, includes all costs necessary to make the intangible asset ready for its intended use. Internally created intangibles: ->intellectual property: generally expensed, only capitalize direct costs incurred in developing the intangible, such as legal costs. Chapter 12 intangible assets: amortization of intangibles. Limited-life/useful life/finite life intangibles (e. g. patents, franchises and licenses, copyrights): amortize to expense, credit asset account or accumulated amortization, exp xxx. Indefinite-life intangibles (e. g. trademarks, goodwill): no foreseeable limit on time the asset is expected to provide cash flows, no amortization, accounting for intangibles. *except for direct costs, such as legal costs.
