In 1975, Riveria Company had acquired copyrights for $750,000 on several literary works from some obscure 18th century authors. These copyrights were fully amortized by 2015. In early 2015, a new anthropological discovery made these copyrights worth $2,500,000. As a result, Riveria should report which of the following in its financial statements for 2015?

Question

Quizplus · Accepted Answer

Under U.S. GAAP, once an intangible asset like copyrights is fully amortized, any subsequent increase in value cannot be recognized in the financial statements. The historical cost principle and the conservatism principle prevent the recognition of unrealized gains.

In 1975, Riveria Company Had Acquired Copyrights for $750,000 on Several