13.3KB/s O ll4G+12:43 PM6100:17:07 RemainingMultiple ChoiceWhich of the following statementsis false regarding PATENT[technology-based intangible asset]?The cost of a patent includes purchase priceand any directly attributable expenditureincurred in acquiring the patent and putting itinto use.O All related research & developmentexpenditures for an internally developedpatent are generally expensed as incurred.Legal fees and litigation costs of successfullydefending a patent are capitalized as part ofthe cost of patent.Patents should be amortized over the legallife or useful life, whichever is shorter.9 of 25レ

The assets that are held by the organization that does not have a physical substance are described…

Multiple Choice Which of the following statements is false regarding PATENT [technology-based intangible asset]? The cost of a patent includes purchase price and any directly attributable expenditure incurred in acquiring the patent and putting it into use. All related research & development expenditures for an internally developed patent are generally expensed as incurred. Legal fees and litigation costs of successfully defending a patent are capitalized as part of the cost of patent. Patents should be amortized over the legal life or useful life, whichever is shorter.

Multiple Choice Which of the following statements is false regarding PATENT [technology-based intangible asset]? The cost of a patent includes purchase price and any directly attributable expenditure incurred in acquiring the patent and putting it into use. All related research & development expenditures for an internally developed patent are generally expensed as incurred. Legal fees and litigation costs of successfully defending a patent are capitalized as part of the cost of patent. Patents should be amortized over the legal life or useful life, whichever is shorter.

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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Consolidated Balance Sheet Working Paper, Identifiable Intangibles International Auto (IA) acquires all of the stock of Genuine Parts (GP) and reports the acquisition as a stock investment on its own books. The acquisition involves the following payments. All amounts are in thousands. Cash paid to GP shareholders $10,000 2,400 Cash paid to consultants and lawyers Fair value of new IA stock issued, 1,000 shares, $4 par 72,000 1,800 500 Stock registration fees, paid in cash Fair value of earnings contingency The earnings contingency, if paid, will occur three years subsequent to the acquisition. The balance sheet accounts of GP and IA, just prior to the acquisition, are as follows: International Auto (in thousands) Current assets Fixed assets, net Trademarks Current liabilities Long-term liabilities Common stock, par value Additional paid-in capital Retained earnings Accumulated other comprehensive income Treasury stock Total Book Value Dr (Cr) $60,000 840,000 178,000 (50,000) (700,000)…
In the case study of Company XYZ's challenges in accounting for goodwill and intangible assets impairment, which factor poses a risk to the value of intangible assets such as patents and software? A) Technological advancements B) Annual amortization C) Lack of impairment testing D) Economic stability
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The main objective of IAS 36 Impairment of Assets is to prescribe the procedures that should ensure that an entity's assets are included in its statement of financial position at no more than their recoverable amounts. Where an asset is carried at an amount in excess of its recoverable amount, it is said to be impaired and IAS 36 requires an impairment loss to be recognized. Required: Define an impairment loss explaining the relevance of fair value less costs to sell and value in use and state how frequently assets should be tested for impairment. 2. Describe the possible incators of impairment. 3. Explain how an impairment loss is accounted for after it has been calculated.
S1: The realization process depends on the type of the property, plant and equipment-if the property, plant and equipment are non-depreciable, the realization of a gain or loss on an intercompany sale must await the property, plant and equipment's resale to outsiders; if the property. Plant and equipment are depreciable, the realization of gain or loss on an intercompany sale occurs on a piece meal basis over the remaining useful life of the property, plant and equipment. S2: Unrealized intercompany gains or losses involving the non-depreciable assets are viewed as being realized gradually over the remaining life of the asset as it is used by the purchasing affiliate. O Only S1 is correct. O Only S2 is correct. O Both statements are correct. O Both statements are incorrect.
A computer software purchased as an integral part of a computer-controlled machine tool that cannot operate without the specific software shall be treated as O Property, plant and equipment O Expense O Intangible asset O Inventory Which cost associated with a trademark should not be capitalized? * Consulting fee O Research and development fee O Design cost O Attorney fee An entity is performing an annual test of the impairment of goodwill for a cash-generating unit. It has determined that the fair value of the unit exceeds the carrying amount. Which statement is true concerning the test of impairment? * O Goodwill should be retested at the entity level. The assets and liabilities should be valued to determine if there has been an impairment of goodwill. O Goodwill should be written down as impaired. O Impairment is not indicated and no additional analysis is necessary. Goodwill should be tested periodically for impairment O At the subsidiary level O At the industry segment level O At…
Research & Development costs: A)Are included in the cost of a patent on the balance sheet B) Should be expensed C) Are amortized over the useful life of the patent D) Both A&B are correct
E4
One factor that is not considered in determining the useful life of an intangible asset is * Residual value Provision for renewal or extension Expected action of competitors Legal life When a patent is amortized, the credit is usually made to * The patent account As accumulated amortization account An expense account An accumulated depreciation account A trademark is an example of which category of intangible asset? Artistic-related Contract-based Customer-related Market-related Which is a research and development cost? * Research and development performed under contract for others Development or improvement of technique and process Offshore oil exploration that is the primary activity of an entity Market research related to a major product for the entity O O O O O O O O
lowing appropr right 1. Goodwill 2. Amount realized 3. Fair market value 4. Adjusted basis 5. Holding period a. The ability of a business to generate income in excess of a normal rate on assets due to superior managerial skills, market position, new product technology, etc. b. The amount at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having a reasonable knowledge of the relevant facts. c. It is crucial in determining whether gain or loss from the sale or exchange of a capital asset is long term or short term. d. This amount is the sum of the cash and the fair market value of any property or services received, plus any related debt assumed by the buyer. e. The cost or other basis of property reduced by deprecation (cost recovery) allowed or allowable and increased by capital improvements. Match the following terms in the left column with the appropriate definition from the right column. 1.…