中级财务会计英文ch07.pptVIP

Intangible Assets Chapter 7 Learning Objectives Describe the characteristics of intangible assets. Identify the costs to include in the initial valuation of intangible assets. Explain the procedure for amortizing intangible assets. Describe the types of intangible assets. Explain the conceptual issues related to goodwill. Describe the accounting procedures for recording goodwill. Explain the accounting issues related to intangible-asset impairments. Identify the conceptual issues related to research and development costs. Describe the accounting for research and development and similar costs. Indicate the presentation of intangible assets and related items. Manner of acquisition Identifiability Exchangeability Period of expected benefit Record at current cash equivalent cost, including purchase price, transfer, and legal fees. If the asset is acquired through a nonmonetary exchange, cost is - cash paid, plus - the current market value of the noncash consideration given. If the asset is created internally, the cost may include - only the costs directly associated with the creation of the intangible asset. Costs classified as RD must be expensed in the period incurred. - SFAS No. 2 Intangibles are written off over their useful lives, where the assets have determinable useful lives. Where the intangibles have indefinite useful lives, they are not amortized. Acquired intangibles should not be written off at acquisition. Legal, regulatory, or contractual provisions that place a limit on the maximum economic life. Provisions for renewal or extension of rights or privileges covered by specific intangible assets. Effects of obsolescence, customer demand, competition, rate of technological change, and other economic factors. The entry to record amortization of an intangible asset includes: - a debit to Amortization Expense. - a credit directly to the intangible asset account. An exclusive right recognized by law and registered with the US Patent Office. The hold