Asked by Marianna Scaringella on Jul 22, 2024
Verified
For recognized intangible assets that are considered to possess indefinite lives, what is the accounting treatment for purposes of income recognition?
Intangible Assets
Assets that do not have physical substance but provide economic benefits to the owner, such as patents, trademarks, and goodwill.
Income Recognition
The accounting principle that income should be recognized in the accounting period in which it is earned, irrespective of when the cash is received.
- Describe the method of handling intangible assets in accounting practices, particularly those assets without definitive lifespans, and how their impairments are assessed.
Verified Answer
MS
Miranda ShaverJul 23, 2024
Final Answer :
Assets that are recognized as intangible assets and that are considered to have indefinite lives are assessed for impairment on an annual basis, as opposed to being amortized over their useful lives.
Learning Objectives
- Describe the method of handling intangible assets in accounting practices, particularly those assets without definitive lifespans, and how their impairments are assessed.