Acc011_07_IntangibleAssets

Acc011_07_IntangibleAssets - Intangible Assets Intangible...

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Intangible Assets
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Intangible Assets • Assets which are used in the operation of the business but have no physical substance. For example: – Patents, – Copyrights, – Franchises, – Goodwill, – Organization Costs, – Trademarks
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Intangible Assets • The basis of valuation for intangible assets is cost cost . • In some companies intangible assets like trademarks may be of great value but are not recognized on the accounting records because they were generated internally. • An intangible asset will always appear on the balance sheet if it has been purchased externally.
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Note: One of the objectives of financial reporting was to present information about the financial resources of an enterprise. Omitting internally generated intangible from the balance sheet leaves out important information and may provide a distorted view of the company. It was estimated that unrecorded intangible assets (formula and brand name) account for about 95% of Coke’s $150 billion market value.
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Pfizer Year Market Value of Equity Book Value of Equity Market-to-
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Acc011_07_IntangibleAssets - Intangible Assets Intangible...

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