Intangible Assets Flashcards
What are the two types of intangible assets?
separately transferable intangibles and not separately transferable intangibles
Out of the two types of intangible assets, which does patents, trademarks and legalities fall under?
separately transferable intangibles
Out of the two types of intangible assets, which does patents, trademarks and legalities fall under?
not separately transferable intangibles
When an intangible asset is purchased, then you must record the cost in this way:
capitalize it (record it as an asset on the balance sheet)
When an intangible asset is internally developed, then you must record the cost in this way:
expense what it takes to internally develop the intangible (research and development, marketing, etc.)
This type of intangible asset is an exclusive right granted by the government to an individual author, composer, playwright or similar individual.
copyright
How long does a copyright last?
for the life of the creator + 70 years
What is the depreciation equivalent for an intangible asset called?
amortization
This type of intangible asset is a registered name, logo, package design, image, jingle or slogan.
trademark
True or false: A trademark can be renewed, creating the possibility of it having an indefinite life.
True
Which method is used most often for amortization?
straight-line
Which expense recognition method does amortization fall under?
systematic allocation
What is the journal entry for a trademark that has an indefinite life, so must be impaired annually?
debit loss due to impairment (E)
credit trademark (A)
Goodwill =
purchase price - net assets
To calculate goodwill, you must have found net assets. Net assets =
assets - liabilities is assumed
