FR1- chapter13

definable, provide future economic benefits, can have indefinite or definite lives

intangible assets lack physical substance but are

examples of intangibles

brand names, patents, trademarks, copyrights, customer lists

costs for external purchase

capitalize: purchase price + all other assets necessary to bring the asset to its desired condition for use

costs for internal development

costs should be expensed when incured

indefinite life

no foreseeable limit on the period of time over which the intangible asset is expected to contribute the cash flows of the reporting entity

patent, finite life

legal life of 20 years or shorter estimated useful life

copyright, finite

life of the author plus 70 years or shorter

indefinite

customer list useful life

renewable indefinitely or shorter

franchise, trademark, license,

indefinite

goodwill

indefinite or definite

enviromental credits

crypto

form of digital asset functioning as medium of exchange

goodwill

the premium paid at acquisition when one firm buys another and the purchase price is higher than the fair value of the acquired net assets

a target firm is acquired

goodwill is only recorded as an asset when..

amortization

goodwill is not subject to

useful life

legal regulatory, or contractual provisions often limit the _____ ____ of an intangible asset

0

expected residual value of an intangible asset

the asset will benefit another entity

the residual value is not 0 if ath the end of the assets useful life to the reporting entity

the straight line method

if the firm cannot reasonably estimate a revenue stream, it should use

impairment

subsequent measurement of finite life intangible assets

recoverability test and measurement of impairment loss

impairment steps

future cash flows is less than book value

an impairment loss occurs when the discounted sum of estimated

the difference between the assets book value and its fair value

impairment loss

crypto and goodwill

which indefinite intangilbe is not amortized

annually

subsequent measurement of indefinite life intangible assets occurs

qualitative and quantitative

two assessments for impairment of indefinite life intangibles

likely carrying value is larger than fair value

qualitative assessment

book value exceeds fair value

quantitative test

recoverability test

indefinite life intangibles assets do not need the +

salaries and wages, costs of materials, equipment, facilities, services, indirect costs

rnd expenses

understates

expensing all rnd costs _______ assets and income

capitalized

things that have alternative future uses are

non-rnd costs

when component meets basic functional and economic requirements for sale or use