Intangible Assets Flashcards

1
Q

Costs to maintain goodwill

A

They are expensed; not added to the goodwill value

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2
Q

What level do you test goodwill at

A

At the operating level(reporting unit) or one level below that

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3
Q

Qualitative factors for testing impairment

A
  • Economic conditions: deterioration of economy
  • Industry & Market conditions: decline in industry & increase in costs associated with it
  • Firm specific conditions: decline in cash flow, change in management, loss of important people, bankruptcy, etc.
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4
Q

Impairment Loss J/E

A

Dr. Impairment Loss

Cr. Goodwill

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5
Q

R&D costs for current projects vs current & future projects

A

Current projects are expensed to R&D while current & future projects are depreciated over their estimated future lives and the depreciation goes to R&D over time

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6
Q

R&D research performed by other companies for you

A

When a company performs R&D for you, you expense it and the shit you do for other people don’t count

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7
Q

How are software costs for internal use depreciated

A

Straight line method

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8
Q

How software costs to be sold are depreciated

A
  • Revenue Method: Current year software costs multiplied by {Current year revenue divided by (Current year revenue + Estimated future revenue)} - really just use the percentage of revenue
  • or straight line; which ever is greater
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