Chapter 12 - Intangible assets. After completing this chapter you should be able to: Describe the characteristics of intangible assets, identify the costs to include in the initial valuation of intangible assets, explain the procedure for amortizing intangible assets, describe the types of intangible assets. | Prepared by Coby Harmon University of California, Santa Barbara Intermediate Accounting Intermediate Accounting Prepared by Coby Harmon University of California, Santa Barbara Westmont College Describe the characteristics of intangible assets. Identify the costs to include in the initial valuation of intangible assets. Explain the procedure for amortizing intangible assets. Describe the types of intangible assets. Explain the accounting issues for recording goodwill. LEARNING OBJECTIVES Explain the accounting issues related to intangible-asset impairments. Identify the conceptual issues related to research and development costs. Describe the accounting for research and development and similar costs. Indicate the presentation of intangible assets and related items. After studying this chapter, you should be able to: Intangible Assets 12 PREVIEW OF CHAPTER Intermediate Accounting 15th Edition Kieso Weygandt Warfield 12 LO 1 Describe the characteristics of intangible assets. Characteristics Lack physical existence. Not financial instruments. Normally classified as long-term asset. Common types of intangibles: Patents Copyrights Franchises or licenses Trademarks or trade names Goodwill INTANGIBLE ASSET ISSUES Cola Company’s success comes from its secret formula for making Coca-Cola, not its plant facilities. LO 2 Identify the costs to include in the initial valuation of intangible assets. Purchased Intangibles Recorded at cost. Includes all costs necessary to make the intangible asset ready for its intended use. Typical costs include: Purchase price. Legal fees. Other incidental expenses. Valuation INTANGIBLE ASSET ISSUES LO 2 Identify the costs to include in the initial valuation of intangible assets. Valuation Internally Created Intangibles Generally expensed. Only capitalize direct costs incurred in developing the intangible, such as legal costs. INTANGIBLE ASSET ISSUES Google expensed the R&D costs incurred to develop its valuable search engine. LO 3 Explain the . | Prepared by Coby Harmon University of California, Santa Barbara Intermediate Accounting Intermediate Accounting Prepared by Coby Harmon University of California, Santa Barbara Westmont College Describe the characteristics of intangible assets. Identify the costs to include in the initial valuation of intangible assets. Explain the procedure for amortizing intangible assets. Describe the types of intangible assets. Explain the accounting issues for recording goodwill. LEARNING OBJECTIVES Explain the accounting issues related to intangible-asset impairments. Identify the conceptual issues related to research and development costs. Describe the accounting for research and development and similar costs. Indicate the presentation of intangible assets and related items. After studying this chapter, you should be able to: Intangible Assets 12 PREVIEW OF CHAPTER Intermediate Accounting 15th Edition Kieso Weygandt Warfield 12 LO 1 Describe the characteristics of intangible assets. .
