Accoutning Ch 7
tangible assets
land, land improvements, buildings, equipment, and natural resources
use of MACRS for tax purposes usually results in ______ income tax.
less
trademark
like the name Apple, is a word, slogan, or symbol that distinctively identifies a company, product, or service. The firm can register its trademark with the U.S. Patent and Trademark Office to protect it from use by others for a period of 10 years.
depreciation
allocating the cost of an asset to an expense over its service life
copyright
an exclusive right of protection given by the U.S. Copyright Office to the creator of a published work such as a song, film, painting, photograph, book, or computer software. Copyrights are protected by law and give the creator (and his or her heirs) the exclusive right to reproduce and sell the artistic or published work for the life of the creator plus 70 years. A copyright also allows the copyright holder to pursue legal action against anyone who attempts to infringe the copyright.
patent
an exclusive right to manufacture a product or to use a process. The U.S. Patent and Trademark Office grants this right for a period of 20 years.
goodwill
an intangible asset in the balance sheet. only when one company buys another company. the purchase price exceeds the fair value of the acquired company's identifiable net assets.
residual value
or salvage value, this value is the amount the company expects to receive from selling the asset at the end of its service life.
service life
or useful life, is how long the company expects to receive benefits from the asset before disposing of it. We can measure service life in units of time or in units of activity.
intangible assets
patents, trademarks, copyrights, franchises, and goodwill.
recording long term assets
record it as its cost plus all expenditures necessary to get the asset ready for use.
capitilize
recording an expenditure as an asset
two types of long term assets
tangible and intangible
addition
when we add a new major component to an existing asset
the residual value of an intangible asset is usually ______.
zero