A company has purchased the following intangible assets in separate transactions: (a) A patent which expires after
Question:
A company has purchased the following intangible assets in separate transactions:
(a) A patent which expires after ten years; the company expects to make use of this patent for six years and then dispose of it.
(b) A copyright which expires after 40 years; the company intends to use this copyright for 30 years, after which it is expected to be of no further value.
(c) A trademark relating to a product; this trademark has an unlimited legal life but the company expects to cease manufacture of the product within three years.
Determine the useful life of each of these assets. Assuming that the company does not use the revaluation model, explain how each asset should be treated in the company's financial statements.
Intangible AssetsAn intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...
Step by Step Answer:
a The useful life of the patent is six years The patent s...View the full answer
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville
