ACC 301 - Ch. 12 - True/False
5. Some intangible assets are not required to be amortized every year.
True
9. If a new patent is acquired through modification of an existing patent, the remaining book value of the original patent may be amortized over the life of the new patent.
True
1. Intangible assets derive their value from the right (claim) to receive cash in the future.
False
12. Internally generated goodwill associated with a business may be recorded as an asset when a firm offer to purchase that business unit has been received.
False
15. If market value of an impaired asset recovers after an impairment has been recognized, the impairment may be reversed in a subsequent period.
False
16. The same recoverability test that is used for impairments of property, plant, and equipment is used for impairments of indefinite-life intangibles.
False
17. Periodic alterations to existing products are an example of research and development costs.
False
18. Research and development costs that result in patents may be capitalized to the extent of the fair value of the patent.
False
19. Research and development costs are recorded as an intangible asset if it is felt they will provide economic benefits in future years.
False
2. Internally created intangibles are recorded at cost.
False
20. Contra accounts must be reported for intangible assets in a manner similar to accumulated depreciation and property, plant, and equipment.
False
3. Internally generated intangible assets are initially recorded at fair value.
False
4. Amortization of limited-life intangible assets should not be impacted by expected residual values.
False
8. The cost of purchased patents should be amortized over the remaining legal life of the patent.
False
10. In a business combination, a company assigns the cost, where possible, to the identifiable tangible and intangible assets, with the remainder recorded as goodwill.
True
11. Internally generated goodwill should not be capitalized in the accounts.
True
13. All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs.
True
14. If the fair value of an unlimited life intangible other than goodwill is less than its book value, an impairment loss must be recognized.
True
6. Limited-life intangibles are amortized by systematic charges to expense over their useful life.
True
7. The cost of acquiring a customer list from another company is recorded as an intangible asset.
True