Podcast
Questions and Answers
What is a characteristic of intangible assets?
What is a characteristic of intangible assets?
- They are always classified as short-term assets
- They are tangible in nature
- They are always financial instruments
- They lack physical existence (correct)
How are purchased intangibles typically recorded?
How are purchased intangibles typically recorded?
- At a discounted value to reflect their intangible nature
- At market value on the acquisition date
- At a nominal value to avoid overstatement of assets
- At cost, including necessary expenses to make the asset ready for use (correct)
How are internally created intangibles generally accounted for?
How are internally created intangibles generally accounted for?
- Not accounted for until they are sold or licensed
- Recorded at a higher value to incentivize internal development
- Recorded at market value to reflect their true worth
- Recorded at cost and generally expensed (correct)
Which of the following is a common type of intangible asset?
Which of the following is a common type of intangible asset?
How are internally created intangibles generally accounted for?
How are internally created intangibles generally accounted for?
What costs are typically included in the valuation of purchased intangibles?
What costs are typically included in the valuation of purchased intangibles?
What costs are typically included in the valuation of purchased intangibles?
What costs are typically included in the valuation of purchased intangibles?
How are internally created intangibles generally accounted for?
How are internally created intangibles generally accounted for?
Which of the following is a characteristic of intangible assets?
Which of the following is a characteristic of intangible assets?
How should limited-life intangibles be amortized?
How should limited-life intangibles be amortized?
What is the treatment of indefinite-life intangibles?
What is the treatment of indefinite-life intangibles?
When should companies evaluate limited-life intangibles for impairment?
When should companies evaluate limited-life intangibles for impairment?
How should limited-life intangibles be amortized?
How should limited-life intangibles be amortized?
What is the treatment of indefinite-life intangibles?
What is the treatment of indefinite-life intangibles?
What should companies evaluate limited-life intangibles for?
What should companies evaluate limited-life intangibles for?
How should limited-life intangibles be amortized?
How should limited-life intangibles be amortized?
When should companies evaluate limited-life intangibles for impairment?
When should companies evaluate limited-life intangibles for impairment?
What is the treatment of indefinite-life intangibles?
What is the treatment of indefinite-life intangibles?
Which of the following is an example of marketing-related intangible assets?
Which of the following is an example of marketing-related intangible assets?
How are marketing-related intangible assets like trademarks typically treated in terms of amortization?
How are marketing-related intangible assets like trademarks typically treated in terms of amortization?
What is the treatment of indefinite-life intangible assets in the U.S.?
What is the treatment of indefinite-life intangible assets in the U.S.?
How are marketing-related intangible assets like trademarks typically treated in terms of amortization?
How are marketing-related intangible assets like trademarks typically treated in terms of amortization?
What is the capitalization and renewal period treatment for marketing-related intangible assets in the U.S.?
What is the capitalization and renewal period treatment for marketing-related intangible assets in the U.S.?
What is the treatment of indefinite-life intangible assets in the U.S.?
What is the treatment of indefinite-life intangible assets in the U.S.?
How are acquisition costs of customer-related intangible assets capitalized?
How are acquisition costs of customer-related intangible assets capitalized?
How are customer lists typically amortized?
How are customer lists typically amortized?
In the given illustration, how is the purchase of the customer list and the amortization recorded?
In the given illustration, how is the purchase of the customer list and the amortization recorded?
How should the acquisition costs of customer-related intangible assets be capitalized?
How should the acquisition costs of customer-related intangible assets be capitalized?
What is an example of a customer-related intangible asset?
What is an example of a customer-related intangible asset?
How should the amortization of customer-related intangible assets be recorded?
How should the amortization of customer-related intangible assets be recorded?
How long is the copyright granted for artistic-related intangible assets?
How long is the copyright granted for artistic-related intangible assets?
How should a franchise with an indefinite life be accounted for?
How should a franchise with an indefinite life be accounted for?
What is an example of a contract-related intangible asset?
What is an example of a contract-related intangible asset?
How long is the copyright granted for artistic-related intangible assets?
How long is the copyright granted for artistic-related intangible assets?
How should a franchise with an indefinite life be accounted for?
How should a franchise with an indefinite life be accounted for?
What are examples of contract-related intangible assets?
What are examples of contract-related intangible assets?
How long is the copyright granted for artistic-related intangible assets?
How long is the copyright granted for artistic-related intangible assets?
How should a franchise with an indefinite life be accounted for?
How should a franchise with an indefinite life be accounted for?
What should be the treatment for limited-life intangibles?
What should be the treatment for limited-life intangibles?
Which of the following is an example of a marketing-related intangible asset?
Which of the following is an example of a marketing-related intangible asset?
How are internally created intangibles generally accounted for?
How are internally created intangibles generally accounted for?
What is the treatment of indefinite-life intangible assets in the U.S.?
What is the treatment of indefinite-life intangible assets in the U.S.?
What should companies evaluate limited-life intangibles for?
What should companies evaluate limited-life intangibles for?
How would the unrecovered costs of a successful legal suit to protect the patent generally be reported in the financial statements?
How would the unrecovered costs of a successful legal suit to protect the patent generally be reported in the financial statements?
What is the correct classification for the cost of developing a patent?
What is the correct classification for the cost of developing a patent?
How should the amount to be reported as research and development expense be computed for the given scenario?
How should the amount to be reported as research and development expense be computed for the given scenario?
What would be the correct classification for the cost of equipment acquired that will have alternative uses in future R&D projects over the next 5 years?
What would be the correct classification for the cost of equipment acquired that will have alternative uses in future R&D projects over the next 5 years?
Which intangible asset is renewed every 10 years with no amortization?
Which intangible asset is renewed every 10 years with no amortization?
How are customer-related intangible assets typically treated?
How are customer-related intangible assets typically treated?
What is the treatment of artistic-related intangible assets?
What is the treatment of artistic-related intangible assets?
How are contract-related intangible assets typically amortized?
How are contract-related intangible assets typically amortized?
What is the purpose of goodwill in accounting?
What is the purpose of goodwill in accounting?
How are technology-related intangible assets typically amortized?
How are technology-related intangible assets typically amortized?
What is the treatment of indefinite-life intangibles?
What is the treatment of indefinite-life intangibles?
How are limited-life intangibles typically amortized?
How are limited-life intangibles typically amortized?
What is the excess of purchase cost over the fair value of identifiable net assets acquired known as?
What is the excess of purchase cost over the fair value of identifiable net assets acquired known as?
Which of the following is an example of an artistic-related intangible asset?
Which of the following is an example of an artistic-related intangible asset?
What is the main category of intangible assets that includes customer-related assets?
What is the main category of intangible assets that includes customer-related assets?
Under IFRS, what is required for some development costs of intangibles?
Under IFRS, what is required for some development costs of intangibles?
Flashcards
Intangible Asset Characteristic
Intangible Asset Characteristic
Lacking physical presence; these assets are non-physical.
Purchased Intangible Recording
Purchased Intangible Recording
Recorded at cost, including expenses needed to use the asset.
Internally Created Intangible
Internally Created Intangible
Generally expensed, not capitalized unless specific rules apply.
Example of Intangible Asset
Example of Intangible Asset
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Limited-Life Intangible Amortization
Limited-Life Intangible Amortization
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Indefinite-Life Intangible Treatment
Indefinite-Life Intangible Treatment
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Limited-Life Intangible Impairment
Limited-Life Intangible Impairment
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Marketing-Related Intangible
Marketing-Related Intangible
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Customer-Related Intangible Amortization
Customer-Related Intangible Amortization
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Acquisition Costs of Customer Assets
Acquisition Costs of Customer Assets
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Artistic Intangible Copyright
Artistic Intangible Copyright
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Franchise Indefinite Life Accounting
Franchise Indefinite Life Accounting
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Contract-Related Intangible Example
Contract-Related Intangible Example
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Internally Created Intangible Accounting
Internally Created Intangible Accounting
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Indefinite-Life Intangible US Testing
Indefinite-Life Intangible US Testing
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Limited-Life Intangible Evaluation
Limited-Life Intangible Evaluation
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Unrecovered Legal Suit Costs
Unrecovered Legal Suit Costs
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Patent Development Cost
Patent Development Cost
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R&D Expense Calculation
R&D Expense Calculation
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Equipment Cost Classification
Equipment Cost Classification
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Trademarks Renewal
Trademarks Renewal
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Customer Intangibles Treatment
Customer Intangibles Treatment
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Artistic Intangible Treatment
Artistic Intangible Treatment
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Study Notes
Intangible Assets Accounting Overview
- Intangible assets include patents, copyrights, trademarks, goodwill, and more.
- Costs to make intangible assets ready for use are capitalized, including purchase price and legal fees.
- Limited-life intangibles are amortized over useful life, while indefinite-life intangibles are tested for impairment annually.
- IFRS requires capitalization of some development costs for intangibles.
- Six major categories of intangible assets include marketing-related, customer-related, artistic-related, contract-related, technology-related, and goodwill.
- Marketing-related intangible assets can include trademarks and trade names, and are renewed every 10 years with no amortization.
- Customer-related intangible assets, like customer lists, are amortized over their useful life.
- Artistic-related intangible assets, such as plays and literary works, are amortized over useful life.
- Contract-related intangible assets, like franchise agreements, are amortized over the life of the franchise.
- Technology-related intangible assets, such as patented technology, are amortized over the patent's useful life.
- Goodwill represents future economic benefits from acquired assets and is recorded in business combinations.
- Goodwill is the excess of purchase cost over the fair value of identifiable net assets acquired.
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Description
Test your knowledge of intangible assets with this quiz. Learn about the characteristics and valuation of intangibles such as patents, copyrights, trademarks, and goodwill. Understand how these assets are recorded and classified on the balance sheet.
