FAR 9 - Intangible Assets Flashcards
In a company with existing liabilities, how is goodwill calculated?
Assets-Liabilities = Fair value of company. Compare this to Consideration given
Capitalized software costs are amortized by the larger of which two values?
Either straight line depreciation or ration of actual total revenue percentages, unless the resulting amount exceeds NRV in which NRV value bill be used
In a royalty agreement, how would up front payments against royalty income be listed?
It should be listed as unearned royalty revenue.
When a franchisor has only partially completed material services and conditions to the franchisee what percentage of franchise revenue can be recognized?
None. Franchise revenue to the franchisor is an all-or-nothing listing.
Present value of future payments of franchise revenue can be recognized when?
Immediately, but only the present value of future payments.
When software is developed for internal use only what costs can be amortized?
Costs incurred after the preliminary project stage and upgrades and enhancements.
What costs treated as R&D when software is developed for internal use?
All costs before preliminary project stage as well as costs for training, data conversion and maintenance are treated as R&D and expensed immediately.
