ch 11 blue packet info Flashcards
Do you expense or capitalize purchased intangible assets?
Capitalize
Do you expense or capitalize Internally created intangible assets?
expense as incurred
Marketing related intangibles
Ex: Trademark
Indefinite unless told otherwise
Customer related intangibles
Ex: Customer lists
limited life unless told otherwise
artistic related intangibles
Ex: copyrights
limited life unless told otherwise
contract related intangibles
Ex: franchise
Indefinite or limited life
technology-related intangibles
Ex: Patents
Limited life normal legal life is 20 years
goodwill formula
Cash - (FV of asset - FV of liability)
Goodwill journal entry (4)
D Assets
D Goodwill (plug)
C Cash
C Liability
FASB addition disclosures for income statement
Amort exp + impairment loss + continuing operations
FASB addition disclosures for Amortization expense
past 5 years
impairment test for limited life
carrying value is GREATER then future cash flows
Impairment loss formula for intangible assets other than goodwill
Carrying value - fair value
impairment test for Indefinte life
Carrying value is GREATER then fair value
impairment test for goodwill
Net assets including goodwill is GREATER then fair value
Impairment loss formula for goodwill
Net assets - fair value
find the present cash flow formula
PMT/ (1 + Rate)^1
ex: 2 years
PMT/ (1 + Rate)^1 + PMT/ (1 + Rate)^2
Costs similar to R&D Costs (4)
Start up costs
Initial operating losses
Advertising Costs
Computer Software Cost
research and development costs (5)
Materials, equipment, and facilities
Personnel
Purchased intangibles
Contract services
Indirect costs
