1. How should the following intangible assets be recorded?

(a) The company has developed its brand name to the point where it is a very valuable asset. It would appear that if it were to sell the brand name it would receive at least $2 million for it.

The expenditure on the brand name should be initially recognised as an (?) because it was (?)

What is the appropriate measurement basis for subsequent measurement of brand name? (?)

(b) The company acquired a patent two years previously for $1 million. The associated production process is quite specialised; however, there is one other manufacturer who has the necessary knowledge to utilise the patent. That other manufacturer would probably be prepared to pay at least $1.5 million for the patent.

The expenditure on the patent be initially recognised as an (?) because it was (?).

What is the appropriate measurement basis for subsequent measurement of brand name? (?)

(c) The company acquired a franchise McDingbat Hamburgers for $500,000. There is great demand for this franchise as evidence by the wanted advertisements placed in a number of franchise journals. The current market price for such a franchise is $670,000.

The expenditure on the franchise be initially recognised as an (?) because it was (?).

What is the appropriate measurement basis for subsequent measurement of franchise? (?)

Examples: asset, expense, internally expensed, acquired, revaluation model, cost model, revaluation model or cost model,

Fill the (?) by using the examples given above.