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Unformatted text preview: to make sure there has been no impairment to the value of the asset. If there is
impairment, the asset is written down to its fair market value (as discussed above with PP&E)
Types of Intangibles:
Goodwill: Most common intangible, can only be recorded at the time a business is purchased.
Considered to have an indefinite life, so not amortized.
56 Trademaric Special name, image or slogan identified with a product or company (Walmart happy face)
Copyright: Gives owner exclusive right to publish, use, and sell literary, musical, or artistic work.
(Michael Jackson had copyright on Beatles songs)
Patent: Exclusive right granted by federal government for 20 years for discovery of a new product or
process, and allows owner to use, manufacture, or sell either the new product/process or the patent
itself. Prevents a competitor from copying the invention and profiting from it. (Medicines, etc)
Technology: Computer software and development
Franchises: Granted the right to operate (Subway, McDonald's, gas companies, etc.)
Licenses and Operating Rights: Grant particular rights or licenses to a company (Telephone lines, TV air
Research and Development Costs: CANNOT be capitalized under GAAP. Must be expensed as a period
cost as these costs are incurred....
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