MGMT 20000 Lecture Notes - Lecture 21: Intangible Asset

• School: Purdue University
• Department: Management
• Course: MGMT 20000
• Professor: Frank Kane

Document Summary

Patents: exclusive right to manufacture a product or to use a process. When purchased: capitalize the purchase price plus legal and filing fees. Trademarks: word, slogan, or symbol that distinctively identifies a company, product, or service. Renewed for an indefinite number of 10-year periods. Capitalize legal, registration, and design fees (advertising costs expensed as incurred) Franchises: local outlets that pay for the exclusive right to use the franchisor"s name and sell its products within a specified geographical area. The franchise records the initial fee as an intangible asset. Additional periodic payments to the franchisor are usually expensed as incurred. Copyrights: exclusive rights of protection given to the creator of a published work. Granted for the life of the creator plus 70 years. Goodwill: recorded only when one company acquires another company. Goodwill=purchase price-fair value of the identifiable net assets required.