ch12 - Chapter 12 1 Chapter 12: Intangible Assets AIM...

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Unformatted text preview: Chapter 12 1 Chapter 12: Intangible Assets AIM 3331-0U1 Summer 2009 Xinyi Lu Chapter 12 2 What is the value of this mouse? THE WALT DISNEY COMPANY report $ 2,428 millions Intangible assets on November 14, 2008 Chapter 12 3 McDonals repots $ 2,237.4 million Goodwill on Dec.31,2008. What is the value of this M? Chapter 12 4 Learning Objectives 1. Describe the characteristics of intangible assets. 2. Identify the costs to include in the initial valuation of intangible assets. 3. Explain the procedure for amortizing intangible assets. 4. Describe the types of intangible assets. 5. Explain the conceptual issues related to goodwill. 6. Describe the accounting procedures for recording goodwill. 7. Explain the accounting issues related to intangible-asset impairments. 8. Identify the conceptual issues related to research and development costs. 9. Describe the accounting for research and development and similar costs. 10. Indicate the presentation of intangible assets and related items Chapter 12 5 Intangible Asset Issues Copyright Trademark s Receivable Stock Lack of physical existence ? Yes Yes Yes Yes Financial instruments ? No No Yes Yes Intangible ? Yes Yes No No Intangibles have two main characteristics: 1. They lack physical existence. 2. They are not financial instruments. Chapter 12 6 Intangible Asset Issues Normally classified as long-term asset. Common types of intangibles: Patents Copyrights Franchises or licenses Trademarks or trade names Goodwill Chapter 12 7 Valuation Purchased Intangibles: Recorded at cost. Includes all costs necessary to make the intangible asset ready for its intended use. Internally Created Intangibles: Generally expensed. Only capitalize direct costs incurred in developing the intangible, such as legal costs. Chapter 12 8 Amortization of Intangibles Limited-Life Intangibles: Amortize to expense. Credit asset account or accumulated amortization Indefinite-Life Intangibles: No foreseeable limit on time the asset is expected to provide cash flows. No amortization. Chapter 12 9 Accounting for Intangibles Chapter 12 10 Types of Intangibles Six Major Categories: Marketing-related. Customer-related. Artistic-related. Contract-related. Technology-related. Goodwill. Chapter 12 11 Marketing-Related Intangible Assets Examples are: trademarks or trade names, newspaper mastheads, Internet domain names, and noncompetition agreements....
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ch12 - Chapter 12 1 Chapter 12: Intangible Assets AIM...

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