Identify and record the major types of intangible assets.

 Identify and record the major types of intangible assets.


  1. Purchased intangible assets are __________
    1. At their purchase price
    2. Plus all costs necessary to get the asset ready for use.

i.      Legal fees

ii.      Filing fees

  1. Internally generated intangible assets, such as R&D and advertising costs, are ________ as those costs are incurred
    1. IFRS differs, Appendix E-7-
  2. ____________ debit patent for cost of purchase and other fees and credit cash
  3. ___________ provides protection to creator of original work, last for life of creator plus 70 years after that_
  4. ___________ slogans, symbols, logos, must be renewed every 10 years, theoretically can be owned forever as long as renewed_
  5. ___________ run a business under someone else’s name, pay initial franchise fee which I capitalize and expense it over the life of the agreement
  6. _______
    1. Recorded only when a company ____________
    2. ILLUSTRATION 7-6, p. 327

Practice:  On March 31, 2012, the New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $68,000 in cash. The book values and market values of Red Rock’s assets and liabilities were as follows:

Calculate the amount paid for goodwill.

LO 3  Discuss the accounting treatment of expenditures after acquisition.


  1. Capitalize expenditures if they benefit ________ periods.
    1. Additions
    2. Improvements
    3. Legal defense of intangible assets, if successful
  2. Expense expenditures if they benefit only the _______period.
    1. Repairs and maintenance
  3. Materiality
    1. Would the item influence an investor or creditor’s decision?
    2. Place Your Order Here!

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