Extreme UV Inc. has accumulated development costs that meet the criteria for capitalization at December 31,2022, amounting to P39,000. It is estimated that the useful life of this intangible asset will be six years; accordingly, amortization of P6,500 per year is anticipated. Extreme UV, Inc. uses the allowed alternative method of accounting for its long-lived tangible and intangible assets. At December 31, 2024, it obtains market information regarding the then- current fair value of this intangible asset, which suggests a current fair value of these development costs is P40,000; the estimated useful life, however, has not
Extreme UV Inc. has accumulated development costs that meet the criteria for capitalization at December 31,2022, amounting to P39,000. It is estimated that the useful life of this intangible asset will be six years; accordingly, amortization of P6,500 per year is anticipated. Extreme UV, Inc. uses the allowed alternative method of accounting for its long-lived tangible and intangible assets. At December 31, 2024, it obtains market information regarding the then- current fair value of this intangible asset, which suggests a current fair value of these development costs is P40,000; the estimated useful life, however, has not
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 6RE
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Extreme UV Inc. has accumulated development costs that meet the criteria for capitalization at December 31,2022, amounting to P39,000. It is estimated that the useful life of this intangible asset will be six years; accordingly, amortization of P6,500 per year is anticipated. Extreme UV, Inc. uses the allowed alternative method of accounting for its long-lived tangible and intangible assets. At December 31, 2024, it obtains market information regarding the then- current fair value of this intangible asset, which suggests a current fair value of these development costs is P40,000; the estimated useful life, however, has not changed. If the “gross up” revaluation method is used, how much is the gross fair value of the intangible asset as of December 31, 2024?
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