Unformatted text preview: (i.e., when the purchased
price exceeds the fair value of the acquired net asset).
Software costs can be accounted for as intangible assets if the application is to be used during
a period exceeding one year. Software maintenance expenditures may not be capitalized.
Accounting treatment is the same for research and development expenditures.
Lease premiums are recorded at cost and written off over the period in which they contribute
to the generation of income.
Patents and trademarks comprise all amounts paid, so their value includes any research and
development expenses and similar costs.
Research and development expenditures may be capitalized when the following requirements
(1) The expenditures are treated individually by projects, and cost is clearly established so
that it can be distributed over a period of years.
(2) There are reasonable expectations of the success and commercial value of the projects.
The accounting plan (PGC) allows capitalization of research and development cost...
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