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