In: Accounting
Determine whether each of the following scenarios should be accounted for as an intangible asset and, if so, whether it meets the criteria for recognition. Justify your conclusions.
a. Clothier entity has developed a successful brand for its designer clothing that allows Clothier to charge a premium. The entity spends large amounts on maintaining and developing the brand.
b. Gumbo Entity purchased a fishing license from the government last year that allows it to fish for the next five years. Gumbo uses the fish in its famous Cajun style gumbo.
c. Computer Entity has developed an accounting software package. It sells licenses to the software package at a 40% gross profit margin.