Create an account
Examples of marketing-related intangibles
trademarks, Internet domain names, noncompetition agreements
examples of contract-related intangibles
franchise/licensing agreements, construction permits, broadcast rights
fair value test
take fair value with goodwill subtract fair value without goodwill. result is the new goodwill amount.
how are impairments related to intangible assets reported in income
debit loss on impairment, credit the asset
when do you report changes in depreciation estimates
in the current and prospective periods. no change in the past.
impairment losses go in what section
other expenses and losses in the income from continuing operations
2 features of natural resources
complete removal of asset, and the replacement of the asset only by an act of nature
4 factors of depletion base
acquisition cost, exploration costs, development costs, restoration costs
total cost of natural resource - salvage value divided by number of units estimated in resource
3 requirements for PPE
acquired for use in operations, long-term and depreciated, physical substance
what is historical cost
cost of obtaining the asset and bringing it to the location and condition necessary for its use
what do you do with cash discounts for valuing PPE
use the net method - record asset at discounted price
how to value PPE purchased on a lump sum basis
use the fair value of the individual compared to fair value of the total then use book value of acquisition cost to find the value of the individual item
what makes a transaction have commercial substance
if future cash flows change as a result of the transaction
how to calculate recognized partial gain for transaction without substance with boot
(cash received/ cash received + fair value of other assets received) x total gain
entries for disposition
debit cash, debit acc dep, credit machinery, and then credit/debit loss as necessary
assets acquired by the issuance of equity securities are valued based on
their fair values or the fair value of the equity securities, whichever is more reasonably determined
in a nonmonetary exchange of equipment with commercial substance, a gain is recognized when
the fair value of the equipment surrendered exceeds the book value of the equipment given up
when an exchange lacks commercial substance, record new asset at
book value plus any cash - not fair value
4 criteria to capitalize lease
title transfer, bargain purchase option, if term of lease is >75% of economic life of the asset, if pv of minimum lease payments is >90% of FMV of asset
what do you do with rearrangement and reinstallation costs
capitalize the new costs and amortize them over expected remaining life. remove the old installation costs, if known.
interest costs associated with land expenditures (when associated building is being constructed) can be capitalized to
the cost of the building
improvements and replacements are capitalized if they
increase the future service potential of the asset
GAAP depreciation is not equal to tax depreciation. Difference in the timing of these deductions causes
what do you do with an asset that can be used despite being fully depreciated
keep it on the books at historical cost - depreciation
how to account for advertising costs?
usually as incurred or the first time the advertising takes place
if an asset is used despite being fully depreciated, what do we do with it?
keep it on the books at historical cost - accumulated depreciation
Please allow access to your computer’s microphone to use Voice Recording.
Having trouble? Click here for help.
We can’t access your microphone!
Click the icon above to update your browser permissions and try again
Reload the page to try again!Reload
Press Cmd-0 to reset your zoom
Press Ctrl-0 to reset your zoom
It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.
Please upgrade Flash or install Chrome
to use Voice Recording.
For more help, see our troubleshooting page.
Your microphone is muted
For help fixing this issue, see this FAQ.
Star this term
You can study starred terms together