Intangibles Flashcards
What do you expense immediately when looking at research & development?
- Materials used
- Personnel involved
- Contract services used
- Indirect costs assigned
What qualifies as research and development?
- Discovering new knowledge
- Developing new products
- Improving existing products
- Converting knowledge into plans
- Designing new products
- Testing new products
What is considered a patent expense under GAAP?
R & D
Legal fees unsuccessful defense
What is considered a patent capital expense under GAAP?
purchase price of acquired patents
legal fees of successful defense
filing fees
How many times does goodwill need tested with regards to companies with multiple sets of books?
Test for each set of books.
How is goodwill assigned?
At the operating segment level or one level below
What intangible asset is subject to recoverability?
patent
How are intangible assets with indefinite lives tested for impairment?
Tested annual via FV and quantitative impairment test.
Ex: Goodwill or trademark
How are intangible assets with finite lives tested for impairment
They’re tested as needed and subject to FV testing or the recoverability test.
ex: Patent, copyright
Can you reverse previous impairment losses on intangibles?
NO
What costs are incurred during the developmental phase?
R&D Expenses: Planning, designing, coding, testing
What costs are incurred during technological feasibility or after development?
Software costs considered intangibles: Coding and testing after feasibility, producing product masters
What costs are incurred during production and before it is made available to customers?
Production costs considered inventory: duplication, training materials, packaging
What costs are considered once a product has completed production and is available to customers?
Operating expenses which include maintenance and customer support.
