How we account for intangible assets is a controversial issue. There are many who adamantly support the treatment of expenditures on non-monetary intangibles as assets. Others strongly oppose this approach and think such expenditures should be expensed and not capitalized on the balance sheet.
Required:
a. Identify and discuss the reasons why many individuals oppose the capitalization of expenditures related to non-monetary intangibles.
b. Identify and discuss the reasons why many individuals support the capitalization of expenditures related to non-monetary intangibles.
c. If you were the chief financial officer of a large public company with a long history of strong ethical management, would you be inclined to support or oppose capitalizing expenditures on potential intangible assets? Explain your conclusion.
d. If you were the chief financial officer of a small, recently listed, high-technology public company, would you be inclined to support or oppose capitalizing potential intangible asset expenditures? Explain your conclusion.
e. If you were an external auditor, how would you prefer management treat potential intangible asset expenditures? Explain your conclusion