Intangible Assets

What Are Intangible Assets? – Definition Intangible assets are those assets which have no physical substance but have future economic benefits based on rights or benefits accruing to the asset’s owner. Explanation Intangible assets are noncurrent assets that have no physical properties. They generate revenues because they offer a firm value in future revenue production … Read more

Annuity Method of Assets Depreciation

Definition In the annuity method of assets depreciation, it is supposed that the money invested in the purchase of the asset earns interest at a fixed rate. This is debited to the asset account and, according to the annuity table, a certain fixed amount of depreciation is charged everywhere for the estimated useful life of … Read more


Learning Objectives: What are assets in accounting? Types of Assets Classification of Assets Definition of Assets Properties, things and receivables having certain values owned by the business are called assets. Examples Following are some examples of assets. Cash, Debtors, Stock, Accounts Receivable, Prepaid Expenses, Land, Building, Plant, Machinery, Motor Vehicles, Furniture, Fixture, Goodwill, Patents, Copy … Read more

Operating Assets

Operating Assets – Definition The term operating assets is used to identify the broad category of long-lived assets that are used to produce goods or services. This group includes not only tangible assets (often known as property, plant, and equipment or fixed assets) but also those that exist only as intangible rights (such as trademarks, … Read more

Accounting for Asset Exchange

Below is the summary of accounting for asset exchange: Cost of New Asset The recorded cost of the new asset cannot exceed the fair value of the new asset. Cash given Fair value of old asset plus cash. Lower of book value of old asset plus cash or fair value of old asset plus cash. … Read more

Exchange of Similar Nonmonetary Operating Assets

Although some accountants believe exchanges of similar assets should be treated the same as exchanges of dissimilar ones, GAAP treat these transactions as being substantively different. That is, the exchange is viewed as a restructuring of the firm’s productive capacity rather than a disposal and acquisition. Consequently, GAAP prescribe a treatment for these exchanges that … Read more

Identifiable and Unidentifiable Intangible Assets

Definition Identifiable intangibles are assets that are derived from a specific right or ability. Most of them are created by registration with government authority or by contract. Types Some major types of identifiable intangible assets are listed below: Patent—unique right to manufacture a product or to use a process; protected by a legal authority for … Read more

Costs Subsequent to Acquisition

Most operating assets require expenditures to repair, maintain, or improve them. These subsequent costs can pose accounting problems if they are material in amount or significantly affect the asset’s service life. In general terms, the accountant faces the choice between capitalizing the expenditure by increasing the asset’s book value or expensing it in the year … Read more

Acquisition of Multiple Assets Together

Definition and Explanation Because almost every type of asset can be viewed as a set of components, there are few situations in which a single “asset” is acquired. In many (if not most) cases, this fact is ignored because the components are either permanently joined together, share the same useful life, or information about the … Read more