CH 12 - Chapter 12 Intangible Assets Intermediate...

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Unformatted text preview: Chapter 12 Intangible Assets Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield (Copyright Protected) Chapter 12-2 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. Learning Objectives Chapter 12-3 Marketing- related Customer- related Artistic- related Contract- related Technology- related Goodwill Intangible Asset Issues Types of Intangibles Impairment of Intangibles Research and Development (R&D) Costs Presentation of Intangibles and Related Items Characteristics Valuation Amortization Limited-life intangibles Indefinite-life intangibles other than goodwill Goodwill Summary Identifying R&D Accounting for R&D Similar costs Conceptual questions Intangible assets R&D costs Intangible Assets Chapter 12-4 Intangible Asset Issues LO 1 Describe the characteristics of intangible assets. Main Characteristics: Characteristics (1) They lack physical existence. (2) They are not financial instruments. (3) Normally classified as short term assets Chapter 12-5 Intangible Asset Issues 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 outside legal costs. Chapter 12-6 Intangible Asset Issues LO 3 Explain the procedure for amortizing intangible assets. Amortization of Intangibles Do or Don t Limited-Life Intangibles: Amortize to expense (similar to straight line depreciation). Credit asset account or accumulated amortization. Indefinite-Life Intangibles: No foreseeable limit on time the asset is expected to provide cash flows. No amortization . However , there a NRV/impairment test requirement. Chapter 12-7 Intangible Asset Issues LO 3 Explain the procedure for amortizing intangible assets. Impairment Testing is Required Limited-Life Intangibles Two step test - same as property, plant and equipment as they both have limited lives: Recoverability test (undiscounted cash flows) then: Fair value test Indefinite-Life Intangibles such as Goodwill Single Test: Fair value test only Chapter 12-8 Types of Intangibles LO 4 Describe the types of intangible assets....
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This note was uploaded on 11/10/2011 for the course ACCT 3367 taught by Professor Staff during the Fall '08 term at University of Houston.

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CH 12 - Chapter 12 Intangible Assets Intermediate...

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