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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Some intangible assets that companies may report on their balance sheets include patents, copyrights, trade names, software development costs, and goodwill.

Required:

  1. 1. Discuss which of these intangible assets would typically be amortized and which would not typically be amortized.
  2. 2. Which of these intangibles must be reviewed for impairment annually?

1.

To determine

Identify the intangible assets that would be typically amortized and that would not be typically amortized.

Explanation

Intangible assets: These are the long-term assets which are not physical in nature, but possess value. The intangible assets would be amortized over their definite useful life or limited useful life, and those with indefinite or unlimited lives are not amortized.

The intangible assets that would be typically amortized are as follows:

  • Patents.
  • Software development.
  • Copyrights.

These assets would be amortized based on the expected pattern of benefits which an intangible asset would produce...

2.

To determine

Identify the intangibles that must be reviewed for impairment annually.

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