One reason that GAAP requires companies to recognize intangible assets they acquired from others, but usually does not allow recognition of internally developed intangible assets, is that a verifiable arms-length transaction price exists for the items acquired from others.

Question

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GAAP requires recognition of intangible assets acquired from others because there is usually a verifiable arms-length transaction price for these items, while internally developed intangible assets do not have a reliable market value and are more difficult to measure.

One Reason That GAAP Requires Companies to Recognize Intangible Assets