Create or Purchase | Graded
Identify the types of assets that qualify as intangible assets, what costs should be capitalized
Properly present intangible assets on a balance sheet including amortizing the original cost and adjusting impaired assets down to an appropriate value
Properly account for research and development costs
Prompt: Case for Analysis 12.4 (Czeslaw Corporation) in the text discusses an important managerial decision: should a company create its own intangible assets or purchase them? Please read that case and respond to the questions at the end. In addition, please research the Internet looking for discussion and share the results of your research.
In a business sense, capitalizing rather than expensing the costs of an intangible asset can make the financial statements look better. That is certainly the case for assets purchased from completely unrelated third parties. Please consider this question in your post. How unrelated does a third party need to be? If a company enters into a contract with another company to develop an asset and the contract is basically a road map to the end result (with no provision for deviation and heavy supervision by the company purchasing the asset), would that purchase constitute a capitalizable asset? How about if the purchasing company does it through a subsidiary or as part of a development co-op?
Create or Purchase | Graded Associated Objectives Identify the types of assets t
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Create or Purchase | Graded
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