The approach(es) organizations can take to assign value to intangible assets
Respond to the following in a minimum of 175 words each: APA format, included Reference and citation.
Discussion
#1. Discuss the approach(es) organizations can take to assign value to intangible assets , such as reputation or goodwill, in accounting documents. How accurate do you think these approaches are, and why?
Student Response
#2. Intangible assets are assets that lack physical existence and are not financial instruments. They are normally amortized over their useful life and are normally categorized as long-term assets. For intangible assets to have any value they should generate some measurable amount of economic benefit to the owners. The three approaches that can be used to assign value to intangible assets in accounting documents are 1) income (which includes pricing, volume, better delivery), 2) cost (process economies and marketing cost savings), and 3) market ( that it can increase market share or visibility). (CGMA, 2012) I am not sure if any of these approaches could truly be accurate, especially when we consider the fact that intangible assets are not financial instruments for companies.
There are six different types of intangible assets. They are marketing-related intangible assets, customer-related intangible assets, artistic-related intangible assets, contract-related intangible assets, technology-related intangible assets, and goodwill. Examples of marketing related intangible assets are trademarks, internet domain names, and noncompetition agreements. Types of customer related intangible assets could include customer lists, order backlogs, and customer relationships. Types of artistic related intangible assets are items such as ownership rights to play, literary work, musical works, photographs, and videos. Types of contract related intangible assets are franchise and license agreements, construction permits, and supply contracts. Types of technology related intangible assets are technological patents and trade secrets that have to be granted by the Patent and Trademark Office.
Professor Post
#3. What costs should be capitalized when purchasing or constructing a building?
Answer preview to the approach(es) organizations can take to assign value to intangible assets
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