Assume your hat company registered a trademark, find the GAAP guidance using FASB Accounting Standard Codification (ASC) system. Answer the following questions and indicate the specific FASB ASC references that provide the proper guidance (e.g. 210-10-1).
Trademark is an example of marketing intangibles.Marketing intangibles are assets used to market or promote a business which includes trade names,trademarks,company names etc.They include words or symbols that identify products,services or companies.
a. When we are acquiring a trademark from a design company, they are capitalized at their aquisition price.In other words we can say they are recorded as an intangible asset at the price we had paid to purchase the asset.We cannot amortise the cost because they have indefinite lives but will be tested for impairment.
b. When the trademark are internally created ,they are capitalized for the amount of legal fees, registeration fees, design and consulting fees and other cost excluding "Research & Development" which is expensed during the period.
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