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Kieso_Inter_13e_Ch12

Kieso_Inter_13e_Ch12 - Chapter 12-1 C H A P T E R C H A P T...

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Unformatted text preview: Chapter 12-1 C H A P T E R C H A P T E R 12 12 I N T A N G I B L E A S S E T S I N T A N G I B L E A S S E T S Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield Chapter 12-2 Intangible Asset Issues Intangible Asset Issues LO 1 Describe the characteristics of intangible assets. LO 1 Describe the characteristics of intangible assets. Two Main Characteristics : Characteristics (1) They lack physical existence. (2) They are not financial instruments. Normally classified as long-term asset. Common types of intangibles: Patents Copyrights Franchises or licenses Trademarks or trade names Goodwill Chapter 12-3 Intangible Asset Issues Intangible Asset Issues LO 2 Identify the costs to include in the initial valuation of intangible assets. LO 2 Identify the costs to include in the initial valuation of intangible assets. Purchased Intangibles : Recorded at cost. Includes all costs necessary to make the intangible asset ready for its intended use. Valuation Internally Created Intangibles: Generally expensed. Only capitalize direct costs incurred in developing the intangible, such as legal costs. Chapter 12-4 Intangible Asset Issues Intangible Asset Issues LO 3 Explain the procedure for amortizing intangible assets. LO 3 Explain the procedure for amortizing intangible assets. 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 12-5 Intangible Asset Issues Intangible Asset Issues LO 3 Explain the procedure for amortizing intangible assets. LO 3 Explain the procedure for amortizing intangible assets. Accounting for Intangibles Illustration 12-1 Chapter 12-6 Types of Intangibles Types of Intangibles LO 4 Describe the types of intangible assets. LO 4 Describe the types of intangible assets. Six Major Categories: (1) Marketing-related. (2) Customer-related. (3) Artistic-related. (4) Contract-related. (5) Technology-related. (6) Goodwill. Chapter 12-7 Types of Intangibles Types of Intangibles LO 4 Describe the types of intangible assets. LO 4 Describe the types of intangible assets. Marketing-Related Intangible Assets Examples are: trademarks or trade names, newspaper mastheads, Internet domain names, and noncompetition agreements. Trademark or trade name has legal protection for indefinite number of 10 year renewal periods. Capitalize acquisition costs. No amortization. Chapter 12-8 Types of Intangibles Types of Intangibles LO 4 Describe the types of intangible assets. LO 4 Describe the types of intangible assets. Customer-Related Intangible Assets Examples are: customer lists, order or production backlogs, and both contractual and noncontractual customer relationships....
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