Principles of Financial Accounting · free preview
Accounting for Intangible Assets
Intangible assets are recorded at cost, amortized over finite lives like a patent's twenty years, left unamortized when lives are indefinite like trademarks, and tested for impairment whenever evidence suggests carrying value may not be recoverable.
1. Acquiring intangibles
Acquiring intangibles
2. Amortization of finite lives
Amortization of finite lives
3. Indefinite lives and impairment
Indefinite lives and impairment
4. Why the distinction persists
Why the distinction persists
5. Acquisition cost of intangibles
Which costs enter the capitalized value of a purchased patent?
6. Amortization pattern
How is a finite-lived intangible typically amortized?
7. Goodwill source
When does goodwill appear on a company's books?
8. Impairment reversal
An impaired intangible is later found to have recovered value. What does GAAP allow?
9. Annual patent amortization
A patent capitalized at 50,000 dollars has a 10-year useful life. Compute annual amortization in dollars, number only.
10. Goodwill life classification
Goodwill is classified as having which life, one word?
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