Chapter 10, Problem 15DQ

To determine

Intangible Assets:

Intangible assets are the assets which do not have any physical form of existence but they have value as any other physical asset held by the company. Like any other asset of the company they are being purchased and sold at a specific value. Generally they occur in the form of goodwill, patents, trademarks and copyrights.

Goodwill:

Goodwill is the additional value in the form of premium to the total physical assets of the company. A company’s goodwill is represented in terms of the reputation of its brand, customer satisfaction and trust over the company, company’s relationship with its employees, authorities and any other existing stakeholders, including the patents and copyrights acquired by it.

To explain: If the company plans to incur costs each year to maintain the value of the goodwill whether it should be amortized or not.