During 2010, Farver Company incurred $240, 000 in legal fees in defending a patent with a carrying value of $2, 500, 000 against an infringement.Farver's lawyers were not successful with the defense of the patent.The legal fees should be

Question

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The legal fees incurred in defending the patent should be expensed in 2010 as it did not increase the value of the patent nor did it create any future economic benefits. It should be classified as an ordinary expense in the income statement.

During 2010, Farver Company Incurred $240, 000 in Legal Fees