Patents, Researches, Goodwill and their amortization.
Objectives
1. Be familiar with Intangible assets
2. Understand amortization process for intangible assets
Over what time the cost of a purchased Patent should be amortized?
The cost of a purchased patents should be amortized over
the patent’s expected usefulness (Warren, 2009, p.254).
What is the required accounting treatment for research and costs?
They are accounted for as current operating expenses in
the period in which they are incurred(Warren, 2009, p.255)
How should Goodwill be amortized?
Good will does Not amortize
A loss should be recorded if the business
prospects of the acquired firm become
significantly impaired.
The loss should be recorded in the “Other Expenses’ income statement)
(Warren, 2009, p.256).
Financial Reporting intangible assets (conclusion)
The amount of depreciation and amortization expenses of a period should
be reported separately in the income statement or disclosed in a note
(Warren, 2009, p.257).
A General description of the methods used in computing them should be reported
References
Warren, S. C.( 2009).Survey of accounting.
4th ed. Ohio: South-Western Cengage learning
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