If a trademark is developed by the enterprise itself, the costs should be
A) capitalized but not amortized.
B) capitalized only if future benefits are reasonably assured.
C) capitalized, but only from the point in time when all six capitalization criteria are met in the development phase.
D) capitalized as soon as the development phase starts.

Question

Quizplus · Accepted Answer

According to US GAAP, internally developed trademarks should be capitalized once all six capitalization criteria are met during the development phase. These criteria include: (1) technical feasibility of completing the asset, (2) intent to complete the asset, (3) ability to use or sell the asset, (4) generation of future economic benefits, (5) availability of resources to complete the asset, and (6) ability to measure the cost of the asset reliably. Once all of these criteria are met, the costs incurred in the development of the trademark should be capitalized and recognized as an intangible asset on the balance sheet.

If a Trademark Is Developed by the Enterprise Itself, the Costs