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  • Accounting for Franchises

    Contract related intangible assets will include franchise and licensing agreements, construction permits, broadcast rights, and service or supply contracts. Below is an outline with visuals as taught by Universal CPA Review. Franchisee Accounting – Franchise accounting is a similar concept to accounting for intangible assets, however, certain specific variables apply.  Initial franchise fees – The present value […]

  • Are Intangible Assets Capitalized or Expensed?

    The short answer is it depends. Intangible assets (e.g., trademarks, copyrights, patents etc.) can generally present themselves on a company’s financial statements in one of two ways, they can either be purchased or developed internally. While purchased/acquired intangible assets will always be capitalized as a noncurrent asset on the balance sheet and subsequently amortized, the […]

  • What is a depreciation tax shield?

    In general, a tax shield is anything that reduces the taxable income for personal taxation or corporate taxation. Depreciation is considered a tax shield because depreciation expense reduces the company’s taxable income. When a company purchased a tangible asset, they are able to depreciation the cost of the asset over the useful life. Each year, […]