Asked by Kwama Kenyatta on May 08, 2024
Verified
The cost of successfully defending a patent in an infringement suit should be
A) charged to Legal Expenses.
B) deducted from the carrying amount of the patent.
C) added to the cost of the patent.
D) recognized as a loss in the current period.
Infringement Suit
A legal case brought against an individual or company for violating a patent, copyright, trademark, or other intellectual property rights.
Legal Expenses
Costs incurred by a business for legal services, such as attorney fees and court costs.
- Gain insight into the statutory and beneficial life of intangible assets and how it affects amortization.
- Master the approach to allocating costs and detailing intangible assets in financial statements.
Verified Answer
PW
PIYUMI WIJEWARDHANAMay 09, 2024
Final Answer :
C
Explanation :
The cost of successfully defending a patent in an infringement suit is considered to add value to the patent and thus should be capitalized by adding it to the cost of the patent. This reflects the expenditure's role in securing the patent's enforceability and future economic benefits.
Learning Objectives
- Gain insight into the statutory and beneficial life of intangible assets and how it affects amortization.
- Master the approach to allocating costs and detailing intangible assets in financial statements.