Answered: Describe the Costs of Defending…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Describe the Costs of Defending Intangible Rights.

Expert Solution

Step 1

Introduction

Intangible assets are the assets that cannot be seen physically, but its' presence in business have great value. These assets are non-current as well as non-monetary in nature too. Intangible assets are of 2 types -

Legal Intangible Assets - thses are IPR (Intellectual Property Rights) such as Copyrights, Trademarks etc.
Competitive Intangible Assets - these are customer loyality, structural activities, leverages etc which is earned with the help of companys' performance and through human capital.

Few Costs that may arise for defending intangible rights are mentioned below -

Cost incurred during purchase of such rights, Legal fees if someone misuse the right (eg. Patent infringement, Copyright infringement), reserach and development costs, insurance etc.

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