Intermediate Accounting Problem Solving Survival Guide

Intermediate Accounting Problem Solving Survival Guide-8
Description Accounting for internally-created intangibles.

Which of the following intangible assets should not be amortized?

All of these intangible assets should be amortized. When a patent is amortized, the credit is usually made to a.

Codification assignments –focus on vocabulary and basic concepts useful in understanding recognition and measurement issues covered in this class.

Codification assignments must be done on a computer.

Exam 3 will be taken during the last scheduled class meeting. multiple choice) and problem-solving and may include other testing elements. Assignments will be graded on the basis of quality of content, form and presentation.

Text assignments - and may not be submitted before class, through e-mail, the Digital Drop Box or by another person.CHAPTER 12 INTANGIBLE ASSETS TRUE-FALSE—Conceptual Answer F F F F T T T F T T T F T T F F T F T F No. MULTIPLE CHOICE—Conceptual Answer c b d d b d c d b c a c b a d a b c b No. capitalized either when purchased or created internally. carrying amount and the expected future net cash flows. Intangible assets derive their value from the right (claim) to receive cash in the future. Internally created intangibles are recorded at cost. Internally generated intangible assets are initially recorded at fair value. Amortization of limited-life intangible assets should not be impacted by expected residual values. Some intangible assets are not required to be amortized every year. Limited-life intangibles are amortized by systematic charges to expense over their useful life. The cost of acquiring a customer list from another company is recorded as an intangible asset. The cost of purchased patents should be amortized over the remaining legal life of the patent. If a new patent is acquired through modification of an existing patent, the remaining book value of the original patent may be amortized over the life of the new patent. In a business combination, a company assigns the cost, where possible, to the identifiable tangible and intangible assets, with the remainder recorded as goodwill. Internally generated goodwill should not be capitalized in the accounts. Internally generated goodwill associated with a business may be recorded as an asset when a firm offer to purchase that business unit has been received. All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs. If the fair value of an unlimited life intangible other than goodwill is less than its book value, an impairment loss must be recognized. If market value of an impaired asset recovers after an impairment has been recognized, the impairment may be reversed in a subsequent period. The same recoverability test that is used for impairments of property, plant, and equipment is used for impairments of indefinite-life intangibles. Periodic alterations to existing products are an example of research and development costs. Research and development costs that result in patents may be capitalized to the extent of the fair value of the patent. The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be a. To protect its patent, the corporation purchased on January 1, 2007 a patent on a competing product which was originally issued on January 10, 2003. MC MC MC P Intangible Assets 12 - 5 TRUE-FALSE—Conceptual 1. amortized over the legal life of the purchased patent. added to factory overhead and allocated to production of the purchaser's product. amortized over the remaining estimated life of the original patent covering the product whose market would have been impaired by competition from the newly patented product. Riser Corporation was granted a patent on a product on January 1, 1998. Easton was able to acquire Lofton at a bargain price. it represents the purchase price of a business that is about to be sold. it is the difference between the fair market value of the net tangible and identifiable intangible assets as compared with the purchase price of the acquired business. the value of a business is computed without consideration of goodwill and then goodwill is added to arrive at a master valuation. it is the only account in the financial statements that is based on value, all other accounts are recorded at an amount other than their value. Easton Company and Lofton Company were combined in a purchase transaction. COURSE OBJECTIVE: The objective of this 3 credit/ 3 lecture hour course is to gain a sound understanding of generally accepted accounting principles governing recognition and measurement of assets and liabilities in financial statements used by parties external to the business enterprise. Other Assignments: Generally, all assignments are to be prepared on the computer and presented in a format that would be acceptable in a business environment. Special assignments - emphasize research, analysis, applications and/or writing skills.COURSE OUTCOMES: Exams: Exams 1 and 2 will be taken at one of the ACC Testing Centers. Assignments must be done on the computer and must reflect the student’s independent work.

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