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CHAPTER 12 Tangible assets, accounting for their costs, and amortizing…

- - - - Examples: Plays , literary works, pictures
      - Copyright granted for the life of the creator plus 70 years
      - Accounting
        
        Capitalize costs of acquiring and defending
        
        Amortized to expense over useful life
    - - Examples: Franchise and licensing agreements, construction permits, broadcast rights, and service or supply contracts
      - Accounting
        
        Capitalize cost of acquiring and defending
        
        If limited life - amortized to expense over the life of the franchise
        
        If indefinite life - carried at cost and not amortized
    - - Examples: Patented technology and trade secrets granted by the U.S Patent and Trademark Office
      - Patent gives holder exclusive use for 20 years
      - Accounting
        
        Capitalize costs of purchasing and defending patent
        
        expense any R&D costs in developing a patent
        
        Amortize over legal life or useful life, whichever is shorter
  - - - indefinite life
      - should not be amortized
      - only adjust carrying value when goodwill is impaired
    - - Purchase price less than the fair value of net assets acquired
      - Amount is recorded as a gain by the purchase
- - - - Capitalize costs of acquiring and defending
      - No amortization
  - - - Capitalize costs of acquiring and defending
      - Amortized to expense over useful life