Intangible Assets Flashcards
1
Q
Costs to maintain goodwill
A
They are expensed; not added to the goodwill value
2
Q
What level do you test goodwill at
A
At the operating level(reporting unit) or one level below that
3
Q
Qualitative factors for testing impairment
A
- Economic conditions: deterioration of economy
- Industry & Market conditions: decline in industry & increase in costs associated with it
- Firm specific conditions: decline in cash flow, change in management, loss of important people, bankruptcy, etc.
4
Q
Impairment Loss J/E
A
Dr. Impairment Loss
Cr. Goodwill
5
Q
R&D costs for current projects vs current & future projects
A
Current projects are expensed to R&D while current & future projects are depreciated over their estimated future lives and the depreciation goes to R&D over time
6
Q
R&D research performed by other companies for you
A
When a company performs R&D for you, you expense it and the shit you do for other people don’t count
7
Q
How are software costs for internal use depreciated
A
Straight line method
8
Q
How software costs to be sold are depreciated
A
- Revenue Method: Current year software costs multiplied by {Current year revenue divided by (Current year revenue + Estimated future revenue)} - really just use the percentage of revenue
- or straight line; which ever is greater
