Ch 10 Legal fees.. capitalize if they were successful or needed to file patent but not when its a loss.

when selling asset like machinery, include a debit to AD if no commercial substance then no gain is recognized but if there is a loss then use fair value to value the asset R&D is expense as incurred if the patent is developed internally capitalize legal and filing fees to secure patent even if internally developed can purchase another company or develop to get goodwill donated assets are revenue assets classified as held for sale arent depreciated or amortized commercial substance means future cash flows may change because of the exchange if bought then developed technology is capitalized as asset and amortized capitalize R&D if you bought a company with in-process R&D (is now an indefinite life) R&D service for another company = capitalized as inventory Expenditures made after feasibility but before its ready for commercial production = capitalized Costs incurred before feasibility is expensed Organization costs are expensed = start-up costs like legal fees and state filing fees to incorporate Software development costs are capitalized as intangible asset after tech feasibility but before software is available for release to customers Capitalize costs of computer software purchased for internal use

Ch 11 For PP used in manufacture of a product, depreciation is a product cost so is included in the cost of inventory. Later when product is sold, depreciation will be included in COGS Same for depletion

Ch 12 12-10 also kind of hard Fair value option so unrealized holding loss is included in I/S in 2013 net income instead of OCI.. no JE for net income Total effect on net income = cash dividends net unrealized holding loss (or fair value adjustment same numbers) Equity method vs fair value option

No entry to adjust for changes in fair value as this investment is accounted for under the equity method. fair value adjustment Accounts for changes in fair value of investments that havent been sold Removes from the fair value adjustment and net income any unrealized holding gains or losses that were recognized in prior periods Realized gains and losses are shown in NI for TS and AFS Either HTM or AFS to TS: include in current NI the total unrealized G/L as if it all happened in the current period TS to Either HTM or AFS: include in current NI any unrealized G/L that happened in the current period before the transfer. Unrealized G/L that happened in prior periods already were included in NI in those periods HTM to AFS: no current income effect. Report total unrealized G/L in AOCI AFS to HTM: no current income effect. Dont write off any existing unrealized holding G/L in AOCI, but amortize it to NI over the remaining life of the security (fair value amount becomes the securitys amortized cost basis) Put the table thing with goodwill and depreciation (like last prob on past midterm) Fair value option just means make HTM and AFS to TSunrealized gains and losses are recognized in NI To hedge Purchases and sale of investments are investment activities not operational If FV of HTM or AFS falls below amortized cost, then is called other-than-temporary (OTT) = OTT impairment loss in earnings, not recognized for HTM Change in accounting estimate No entry to recognize proportionate share of investees net income and any related adjustments in Fair value method No entry in adjust investment to reflect changes in fair value in equity method