MUHASEBE II

All of the statements are true for intangible assets.

Intangible assets have distinctive qualifications from other assets that require them to be recorded as intangible asset. These are;

Goodwill has an infinite life.

Patents are government grants given to the holder for invention in all fields of technology providing that the invention is new, involves an inventive step and is applicable to industry.

Amortization Rate= 1/Copyright’s Useful Life =1/5

Amortization Expense = Capitalized Cost x Amortization Rate

Amortization Expense = 2,500,000 x 1/5 = 500,000 TL

A franchise is a contractual arrangement between a franchisor and a franchisee. Franchises are privileges granted by a business to sell goods or services under specified conditions. The franchisor grants the franchisee the right to sell certain products, perform specific services, or use certain trademarks or trade names, usually within a designated geographic area

Natural resources are long-term assets that come from the earth that are consumed such as Timberlands, Oil and Gas Reserves, and Mineral Deposits.

Natural resources are long-term assets that come from the earth that are consumed such as Timberlands, Oil and Gas Reserves, and Mineral Deposits.

 These long-lived productive assets have two distinguishing characteristics:25 (1) they are physically extracted in operations (such as mining, cutting, or pumping), and (2) they are replaceable only by an act of nature.

The allocation of the natural resources’ cost to expense in a rational and systematic manner over the resource’s useful life is called depletion.

All of the statements above are true for the reporting for intangible assets and natural resources.