Chase_6615_ch12 - Andrew Chase Intermediate Accounting...

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Andrew Chase Intermediate Accounting Chapter 12 12-1. The two main characteristics of intangible assets are that they lack physical existence and they are not financial instruments. 12-2. If intangibles are acquired for stock the cost is either the fair value of the consideration given or the fair value of the intangible received, whichever is more clearly evident. 12-3. Limited useful life should be amortized by using systematic charges to expense over their useful life. A company does not amortize an intangible asset with an indefinite life. 12-4. The accounting profession makes a distinction between internally created intangibles and purchased intangibles because intangibles generated internally should not be capitalized due to the fact that it is too complex to measure. Purchased intangibles are capitalized because the cost can be verified and compared to fair value. 12-5. This expenditure should be reported as a selling expense. 12-11.
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This note was uploaded on 12/07/2009 for the course ACCT 5521 taught by Professor Englese during the Spring '08 term at Fairleigh Dickinson.

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Chase_6615_ch12 - Andrew Chase Intermediate Accounting...

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