Wiley GAAP: Practical Implementation Guide and Workbook

Chapter 13. INTANGIBLE ASSETS (ASC 350)

INTRODUCTION AND BACKGROUND

The purpose of this Standard is to prescribe the financial accounting and reporting related to intangible assets other than the accounting at acquisition. Subtopics 805-20 and 805-30 address the financial accounting and reporting of intangibles acquired in a business combination at acquisition.

The principal issues involved relate to the nature and recognition of intangible assets, determining their costs, and assessing the amortization and impairment losses that need to be recognized.

DEFINITIONS OF KEY TERMS

Asset. A resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity.

Cost. The amount paid or fair value of other consideration given to acquire or construct an asset.

Depreciable amount. The cost of an asset less its residual value.

Depreciation. The systematic allocation of the depreciable amount of an asset over its expected useful life.

Development. The application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems, or services before the start of commercial production or use.

Fair value. The amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's-length transaction.

Intangible asset. An identifiable, nonmonetary asset without physical substance. The term intangible assets is used to refer ...