What is Internally developed intangibles?
In short
Costs of internally developing, maintaining or restoring intangible assets that aren't specifically identifiable, or that are inherent in a continuing business, such as internally generated goodwill, are expensed as incurred.
Key takeaways
- Legal and registration fees for a patent or trademark are capitalized, but the research behind it is expensed.
- Costs of successfully defending a patent are capitalized; if the defense fails, they are expensed and the patent written off.
- Purchased intangibles are recorded at cost.
Where it's tested
FAR: Intangible Assets & Goodwill — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
How is a patent with a legal life of 20 years but an expected useful life of 8 years amortized?