ACCT 1201 Lecture Notes - Intangible Asset, Fixed Asset, Historical Cost
Document Summary
Intangible assets - intangible assets are rights, privileges, and competitive advantages that result from ownership of long-lived assets that do not possess physical substance. Examples: the patents of polaroid, the franchises of mcdonald"s, the trade name. Macintosh, and nike"s trademark swoosh : acquisition (purchased externally) - intangible assets are recorded at historical cost only if they have been purchased. Example: a company purchases a 25-year patent for ,000 and intends to use it for 20 years; adjusting entry to record ,000 in patent amortization expense (,000 20 years): In 2000, a new company called aol time warner was created when. At the time, the fair market value of time warner was much less than that (approx. Intel chip versus pharmaceuticals: franchises (definite life) - a contractual right to sell certain products or services, use certain trademarks, or perform activities in a geographical region. Example: discovery enterprises had the following selected transactions during 2010: