During 2010, Farver Company incurred $200, 000 in legal fees in defending a patent with a carrying value of $2, 500, 000 against an infringement.Farver's lawyers were successful with the defense of the patent.The legal fees should be

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The legal fees incurred in defending the patent should be capitalized since they are directly related to the acquisition and protection of the patent. The capitalized amount should then be amortized over the remaining economic life or legal life of the patent, whichever is shorter. This treatment is in accordance with the generally accepted accounting principles for intangible assets under ASC 350-30-25.

During 2010, Farver Company Incurred $200, 000 in Legal Fees