Exam 16: Intangible Assets

An intangible asset is recognized if, and only if, which of the following key criteria are met?

The cost of an intangible asset acquired as part of a business com?bination is its fair value at the date of acquisition.

On January 1, 20X7 I-Tech Entity (IE) acquired a patent that expires in ten years for $150,000 in a business combination. IE expects to produce the patented product for the next six years, discontinuing the product line at the end of that time period. IE has a commitment from Advanced Company (AC) to purchase the patent in six years for 20% of its fair value on the date the patent is acquired. Management believes that the straight-line method of amortization reflects the pattern in which the entity expects to consume the patent's future economic benefits. What is the journal entry IE will record on December 31, 20X7?

After initial recognition, intangible assets are usually measured using

Hampshire Borough Proprietaries specializes in brokering patents and trademarks. Hampshire Borough would include these intangible assets at fair market value on their statements of financial position.

The cost of generating other internally generated intangible assets is divided which of the following phase(s)?

Intangible assets are identifiable non-monetary assets without physical substance.

Port Entity owns a specific software that is used to operate computer-controlled crane simulators. These simulators cannot operate without this software since it is an integral part of the related hardware. Explain why or why not the definition of an intangible asset has been met.

Chatton Wooler-Scots Chemical has chemical formula patents that it has purchased. Chatton Wooler-Scots uses the revaluation method of intangible asset valuation. The patents were revalued at the end of the first year and the carrying amount of the patents decreased by ₤5 million. At the end of year two, the carrying value of the patents increased ₤3 million. During year three, the carrying value of the patents decreased by ₤4 million. At the end of year four, the carrying value of the patents increased by ₤10 million. Ignoring amortization, what is the balance of the revaluation surplus account and the amount of profit/loss recognized each year?

Remedy Medical Devise Entity (RMDE) built a loyal portfolio of customers. RMDE expects that the customers will continue to trade with the entity. Explain why or why not the definition of an intangible asset may have met.

Which of the following intangible assets are identifiable?

Which of the following activities must be immediately expensed (may not be capitalized)?

Which method of amortization is most appropriate for a situation in which most of the asset's future benefits occur in the earlier years?

Internally generated brands, mast?heads, publishing titles, customer lists, other similar items, or expenditures on internally generated goodwill are examples of intangible assets.

Intangible assets acquired in a business combination are recognized as assets distinct from goodwill if they are identifiable, what criteria must intangibles must meet to be identifiable?

Each part of an intangible asset with a cost that is significant in relation to the total cost of the item should be amortized separately. This is known as

Development costs are capitalized as an intangible asset when technical and economic feasibility of a project can be demonstrated.

In general, the revaluation model is cheaper and easier to implement than the cost model.

Which of the following does not necessarily satisfy a criteria for recognizing intangible assets in the development phase?

Intangibles can only be generated internally.