A Concept Of Accounting And How Is Applied In Professional Life - 550 Words

A Concept Of Accounting And How Is Applied In Professional Life (Research Paper Sample) Content: UNIVERSITY NAME INTANGIBLE ASSETS NAME CLASS INSTRUCTOR DATE An intangible asset is an asset that does not include physical substance and is usually hard to evaluate. According to Martin and Mary Kelly the measurement of intangible assets has been the main areas of financial reporting. Business operate and compete with intangible assets such as brands and knowledge. Intangible assets play an important role in providing future economic benefits to the business. Examples of intangible assets include, trademarks, patents, import duties, licenses, computer software and goodwill. An intangible asset should be identifiable. An intangible asset must be under entity control so that the entity has their power to gain economic benefits in the future. This control involves legally enforceable rights. The information can be used to determine whether the intangible asset satisfies the usual recognition criteria for an asset and whether it will be probable and then future economic benefits will flow to their entity and whether they cost can be measured reliably. Intangible assets are used when calculating the cost of another business duplicating a given asset. This can be done by using their current cost estimation. They quoted market prices in an existing market gives them most reliable estimate of the fair value of an intangible asset. The best market price is usually the current bid price. If there is no active market for an intangible asset, its best value price is the amount that the entity would have paid for the asset. The useful life of intangible assets is assessed as finite and infinite. An intangible asset with a finite life needs to be a mortise over its life while an asset with no future limit to the period of benefit to their entity is classified as an infinite and is not amortized. The market approach focuses on the past selling schedules. By identifying their brand that is comparable to your brand name and using it as a proxy, then valuation of them market analysis will be reliable. The income method is used to measure the future benefits that the intangible asset will bring to their business and the duration that the business will receive those benefits. This will help in calculating a value for your customers and in focusing efforts on sales on the most profitable customers. Intangible assets grant their potential background for their economic benefits to their owner. This depends on the nature of the intangible asset and the company exhausting it. To qualify as an intangible asset, one should be able to identify and describe the asset and should be protected legally. The information can be used to det...