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Old 05-25-2012, 01:56 PM
 
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It has been suggested that, since many intangible assets have no value except to the company that owns them, they should be valued at $1 or zero on the balance sheet. Many accountants disagree with this view. Which view do you support? Why?
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Old 05-25-2012, 10:55 PM
 
Location: Wartrace,TN
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Quote:
Originally Posted by adamjdoran View Post
It has been suggested that, since many intangible assets have no value except to the company that owns them, they should be valued at $1 or zero on the balance sheet. Many accountants disagree with this view. Which view do you support? Why?
It isn't "many accountants" it is Generally accepted accounting principles.
Generally accepted accounting principles - Wikipedia, the free encyclopedia

It has been suggested that when you are doing accounting homework you do your own research rather than posting questions on the internet.
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Old 05-27-2012, 04:47 PM
 
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well....I have been researched and came down to that very difficult question for me to figure out. I was just trying to get some ideas and help from other people who has better knowledge of accounting principles.
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Old 05-27-2012, 06:39 PM
 
Location: Wartrace,TN
2,458 posts, read 2,715,299 times
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When you purchase a business at a premium you are indicating that you believe the business is worth more than its asset value. This "Goodwill" might be the existing customer base or reputation. By agreeing to pay a premium you have established the fact that you believe the intangible asset (goodwill) has value. To write it off after the purchase is inconsistent with your initial agreement that there IS value. Unless you can provide evidence that the goodwill has become impaired you have no basis to claim it is worthless.
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