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Read the accounting case study, Valuing Information Technology Related to Intangible Assets, (available through Stafford Library). The case study focuses on determining the value of
Read the accounting case study, "Valuing Information Technology Related to Intangible Assets", (available through Stafford Library). The case study focuses on determining the value of information technology (IT) related intangible assets and their effect on business and financial statements. Pay attention to the questions the authors pose about quantifying the value of information technology intangible assets and analyzing the value to determine if they are evenly distributed across firms. Then, answer the following questions:
- How are tangible and intangible assets defined?
- Do you agree that IT hardware investments are increased when complementary investments (i.e., software) are also made? Defend your opinion.
- Why are IT investments riskier than non-IT investments?
- Are there aspects of accounting methods used that may cause investors, security analysts, committee members, etc., to over or under assess the financial performance of the business?
- What factors should an accountant consider when determining amortization timeframes?
- Do you agree with the author's assessment that assets constructed in accordance with accounting standards measure only a fraction of the base value of IT? Why or why not?
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