Question

Select a publicly traded company that makes strong use of intangible assets. Such as Apple Inc

Use sec.gov to look up the 10-K filing

1. What percent of total assets are intangible?

2. What is the company's largest intangible asset? Is this an asset the company actively uses in operations?

3. Identify the disclosures the company makes concerning its intangible assets.

4. Was there a change in intangible assets for the period? Identify the cause of the change.

Answer 1

Note : As per data on <sec.gov> website, Annual Returns & other data relating to Apple Inc filed for fiscal year ended September 30, 2017 is referred. Accordingly, answers to given questions pertains to data related to Apple Inc as on September 30, 2017.

1. Total Assets : $ 375,319 millions

Intangibles : Goodwill = $ 5,717 millions

Acquired Intangible Assets,net = $ 2,298 millions

Total Intangibles = 5717+2298 = $ 8015 million

Thus, percent of Intangible to Total Assets : 8015*100/375319 = 2.14%

2. Largest Intangible asset is Acquired Intangibles, which consists of Patents & licenses.

Goodwill is not amortised. However, Acquired Intangible assets are shown as net. The details are as below :

Gross Carrying Amount = $ 7,607 millions

Accumulated Amortisation = $ (5,309) millions

Thus, Net = $ 2,298 millions

3. Disclosures by Company

The Company’s acquired intangible assets with definite useful lives primarily consist of patents and licenses. The following table summarizes the components of acquired intangible asset balances as of September 30, 2017 and September 24, 2016 (in millions):

	2017												2016
	Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Definite-lived and amortizable acquired intangible assets	$	7,507			$	(5,309	)		$	2,198			$	8,912			$	(5,806	)		$	3,106
Indefinite-lived and non-amortizable acquired intangible assets	100				—				100				100				—				100
Total acquired intangible assets	$	7,607			$	(5,309	)		$	2,298			$	9,012			$	(5,806	)		$	3,206

Amortization expense related to acquired intangible assets was $1.2 billion, $1.5 billion and $1.3 billion in 2017, 2016 and 2015, respectively. As of September 30, 2017, the remaining weighted-average amortization period for acquired intangible assets is 3.4 years. The expected annual amortization expense related to acquired intangible assets as of September 30, 2017, is as follows (in millions):

2018	$	948
2019	505
2020	323
2021	222
2022	131
Thereafter	69
Total	$	2,198

D. Changes

Yes there is change in Gross Value of Intangibles by $ 1,405 millions (i.e. $ 8,912-$7,507)

It relates that certains Intangible assets are disposed off.

Similary there is change in Accumulated Amortisaion by $ 497 millions (i.e. $ 5806- $5309)