In 1970, Ramirez Company had acquired copyrights for $750, 000 on several literary works from some obscure 18th century authors.These copyrights were fully amortized by 2010.In early 2010, a new anthropological discovery made these copyrights worth $2, 500, 000.As a result, Ramirez should report which of the following in its financial statements for 2010?

Question

Quizplus · Accepted Answer

Since the copyrights were fully amortized, their book value would be $0. Accounting principles generally prohibit revaluing intangible assets upwards in financial statements after they have been fully amortized. Therefore, the increase in value would not be recognized in the financial statements directly but should be disclosed in the footnotes if it is considered material.

In 1970, Ramirez Company Had Acquired Copyrights for $750, 000