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Intangible assets

FAR Chapter 15 · Area II · Blueprint II.F

Patents, customer lists, franchises and software have no physical form, yet they can be a company's most valuable assets. The Blueprint asks you to recall the recognition criteria for intangibles, to classify them as finite-lived or indefinite-lived, to calculate amortization and impairment for finite-lived intangibles, and to account for purchased software and cloud computing arrangements. Goodwill and indefinite-lived impairment are tested in BAR. Most questions here ask one thing: capitalize or expense?

In this chapter

1. Recognizing an intangible asset
2. Research and development
3. Finite or indefinite life
4. Defending a patent
5. Impairment of finite-lived intangibles
6. Software bought for internal use
7. Cloud computing arrangements

This chapter has 7 lessons, 50 practice MCQs with explanations and 10 simulations, plus flashcards and a recall sheet.

What this chapter covers

• Recognition criteria
• finite and indefinite lives
• amortization and impairment of finite-lived intangibles
• purchased software and cloud computing arrangements

Chapter 14: Investments · Chapter 16: Payables and accrued liabilities