ch 12 intangible assets

Intangible assets are normally classified as current assets.
false- usually LT assets
Which of the following is not a characteristic of intangible assets?
they are all subject to amortization
Expensing all R&D costs associated with internally created intangible assets results in
understating assets and overstating expenses
Which of the following is a factor to be considered in determining a limited-life intangible asset’s useful life?
any legal provisinos that may limit the useful life, the expected useful life of any related asset, the effects of obsolescence
A purchased limited-life intangible asset ______ amortized and is impairment tested using _______________.
is, the recoverability test then the fair value test
Construction permits are
contract related intangibles
Which of the following is not one of the major categories of intangibles?
financing related
Marketing-related intangibles would include
brand name
The difference between the price paid to acquire another company and the fair market value of that company’s net assets can be referred to as
goodwill, a gaap filler, or a master valuation account
The two principal types of patents issued by the U.S. Patent and Trademark Office are
process and product
On January 1, 2014, Bumper Corp. acquires a customer list for $400,000. Bumper estimates that this customer list will generate value for at least 5 years. At the end of 3 years, Bumper plans to sell the customer list to another company for $62,500. On Bumper’s income statement for the year ended December 31, 2014, how much amortization expense should it report?
112500
Tiburon Corporation purchased a patent for $1,850,000 on November 30, 2012. It has a remaining legal life of 11 years. Tiburon estimates that the remaining useful life of the patent is useful life of 15 years. What balance will be reported on the December 31, 2014 balance sheet for the patent (if necessary, round your answer to the nearest dollar)?
1499621
Which of the following costs of goodwill should be amortized over their estimated useful lives?
not either costs of goodwill drom a business combo accounted for as a purchase and not costs of developing goodwill internally.

goodwill is never amortized

St. Sebastian Company and A. Jamison Company were combined in a purchase transaction. St. Sebastian was able to acquire Jamison at a bargain price. The fair market value of Jamison’s net assets exceeded the price paid by St. Sebastian to acquire the company. Proper accounting treatment by St. Sebastian is to report the excess fair value over purchase price as
a gain
Impairment testing is performed in the same way for indefinite-life intangibles and limited-life intangibles.
false

for indefinite life intangibles a company performs only the fair value test

for limited life perform recoverability and fair value test

Truffle Inc. acquired a patent on January 1, 2011 for $7,800,000. It was expected to have a 10 year life and no residual value. Truffle uses straight-line amortization for its patents. On December 31, 2014, the expected future cash flows from the patent are $518,000 per year for the next six years. The present value of these cash flows, discounted at Truffle’s market interest rate, is $2,120,000. What amount, if any, of impairment loss will be reported on Truffle’s 2014 income statement?
$2,560,000.
The impairment rule for goodwill involves how many steps?
2
Which of the following principles best describes the current method of accounting for research and development costs?
Immediate recognition as an expense
Which of the following research and development costs may be capitalized?
Research and development equipment to be used on current and future projects.
The presentation of intangible assets in the financial statements
1) includes disclosure of amortization expense for the net 5 years
2) includes reporting r and d costs as an expense in the income statement
3) involves crediting amortization directly to the intangible asset account
All of the following statements regarding IFRS accounting treatments for intangibles are true except:
IFRS permits reversal of impairment losses when there has been a change in economic conditions