Understanding Identifiable Intangible Assets: Importance and Implications for Businesses

With respect to identifiable intangible assets other than goodwill, which of the following is true?

If a qualitative assessment of the asset performed by an entity indicates impairment is likely, a quantitative assessment must be performed to determine whether there has been a loss in fair value.

Identifiable intangible assets other than goodwill are assets that have no physical substance, but can be separated from a company’s operations, traded, licensed or rented. Examples of identifiable intangible assets other than goodwill include patents, trademarks, copyrights, franchises, customer lists and technology.

Regarding this type of asset, the following is true:

– Identifiable intangible assets other than goodwill have finite useful lives, meaning they will only benefit the company for a specific period of time.
– The costs to acquire or develop identifiable intangible assets other than goodwill are capitalized and then amortized over their useful lives.
– Identifiable intangible assets other than goodwill are tested for impairment at least annually to ensure that their carrying value is not overstated.
– Identifiable intangible assets other than goodwill are reported separately from goodwill on a company’s balance sheet.

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