Ch+09+Edited

Estimates the useful life of the patent to be eight

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Unformatted text preview: Capitalize costs of acquiring and defending it. Chapter 9-54 Give the owner the exclusive right to reproduce and sell an artistic or published work. Amortized to expense over useful life. SO 7 Identify the basic issues related to reporting intangible assets. Types of Intangible Assets Types of Intangible Assets Trademarks and Trade Names Word, phrase, jingle, or symbol that identifies a particular enterprise or product. ► Wheaties, Monopoly, Sunkist, Kleenex, Coca-Cola, Big Mac, and Jeep. Capitalize acquisition costs. Chapter 9-55 Legal protection for indefinite number of 20 year renewal periods. No amortization. SO 7 Identify the basic issues related to reporting intangible assets. Types of Intangible Assets Types of Intangible Assets Franchises and Licenses Contractual arrangement between a franchisor and a franchisee. ► Toyota, Shell, Subway, and Marriott are franchises. Chapter 9-56 Franchise (or license) with a limited life should be amortized to expense over the life of the franchise. Franchise with an indefinite life should be carried at cost and not amortized. SO 7 Identify the basic issues related to reporting intangible assets. Types of Intangible Assets Types of Intangible Assets Goodwill Includes exceptional management, desirable location, good customer relations, skilled employees, high-quality products, etc. Only recorded when an entire business is purchased. Goodwill is recorded as the excess of ... purchase price over the FMV of the identifiable net over assets acquired. Internally created goodwill should not be capitalized. Chapter 9-57 SO 7 Identify the basic issues related to reporting intangible assets. Types of Intangible Assets Types of Intangible Assets Illustration: Identify the term most directly associated with each statement. 1. The allocation to expense of the cost of an intangible asset over the asset’s useful life. Amortization 2. Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance. Intangible Assets 3. An exclusive right granted by the federal government to reproduce and sell an artistic or published work. Chapter 9-58 Copyrights SO 7 Identify the basic issues related to reporting intangible assets. Types of Intangible Assets Types of Intangible Assets Illustration: Identify the term most directly associated with each statement. 4. A right to sell certain products or services or to use certain trademarks or trade names within a designated geographic area. 5. Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred. Chapter 9-59 Franchise Research and Development Costs SO 7 Identify the basic issues related to reporting intangible assets. Chapter 9-60 Statement Presentation of Long-Lived Assets Statement Presentation of Long-Lived Assets Illustration 9-23 Chapter 9-61 SO 8 Indicate how long-lived assets are reported in the financial statements. Statement Presentation of Long-Lived Assets Statement Pre...
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This note was uploaded on 09/27/2013 for the course MGT 11A taught by Professor Armstrong during the Fall '08 term at UC Davis.

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