week 4 - Intangible Assets Flashcards
Trademarks, trade names, etc
Trade Dress
Internet domain names
Non-competition agreements
Which type of intangibles?
Marketing-related
(Un)Patented technology
Software
Databases
Trade secrets
Which type of intangibles?
Technology-based intangibles
Customer lists
Order or production backlog
Customer contracts/relationships
Which type of intangibles?
Customer-related intangibles
Licensing & royalty agreements
Lease agreements
Employment contracts
Franchise agreements
Which type of intangibles?
Contract-based intangibles
Plays
Literary works
Pictures and photographs
Which type of intangibles?
Artistic-related intangibles
What do you do if an intangible asset cannot be controlled?
Don’t capitalize
What do you do if an intangible asset cannot be identified? (either Legal or contractual or separable)
Don’t capitalize
When is an asset separable?
When it does not have synergies with another company you have acquired
When is an asset legal or contractual?
Legal can be if an intangible is a trade name
An intangible can be contractual when it is a franchise
What do you do if an intangible has been acquired in a business combination = M&A?
capitalize
What do you do if it doesn’t have future economic benefits?
Don’t capitalize
What do you do if it does have future economic benefits and its cost can be reliably measured?
Capitalize
Is R&D capitalized?
No it is expensed as incurred since there is not enough evidence that it is something that will be utilized in the future.
What about development costs? Are they capitalized?
For development costs, the accounting standards provide guidance to determine whether it meets the criteria for future economic benefit
What do we do after a business combination?
We have to account for the differences between the Economic balance sheet and the accounting balance sheet.
