Αποτελέσματα Αναζήτησης
1 Απρ 2007 · This two-part article examines cost recovery of intangible asset expenditures. Part I summarizes the applicable capitalization regulations, Sec. 197 cost recovery and general Sec. 167 amortization rules.
The initial franchise fee is a fee paid to a franchisor in exchange for establishing a franchise relationship, along with the provision of varying levels of pre-opening services. Before the adoption of Topic 606, under the industry-specific guidance in Topic 952, Franchisors, the initial franchise fee typically was recognized when the franchise ...
In May 2020, the Board issued Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) which prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use.
18 Δεκ 2017 · Amortizing initial fees. The franchisee can deduct the initial fee from their business tax return. The franchisee must amortize the fee.
The intangible assets will be amortized over the lifetime of the franchise. The journal entry is debiting Intangible assets – Franchise and credit cash paid. The franchise will be recorded as intangible assets on the balance sheet. The cash is reduced as it is paid to the franchisor. The franchise will be amortized based on the lifetime.
Amortization – (or license) with a limited life should be amortized and expensed over the life of the franchise. If, however, the franchise has an indefinite life, it should be carried at cost and will not be amortized. So how do we record it? Let’s walk through an example that can frequently be seen on the CPA Exam: Previous Question.
If it is indefinite, the asset is not amortized. Although the question of whether an asset’s useful life is definite or indefinite may seem straightforward, certain intangibles—particularly those that are a result of contracted or other legally set terms—are difficult to judge.
