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How fasb asc glossary define a defensive intangible asset

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Reference no: EM133102293

Question - ComWire Company manufactures wireless transponders for satellite applications. ComWire has recently acquired Martin Company, which is primarily known for its software communications development but also manufactures a specialty transponder under the trade name "M-Tech" that competes with one of ComWire's products. ComWire will now discontinue M-Tech and projects that its own product line will see a market share increase. Nonetheless, ComWire's management will maintain the rights to the M-Tech trade name as a defensive intangible asset to prevent its use by competitors, despite the fact that its highest and best use would be to sell the trade name. ComWire estimates that the trade name has an internal value of $1.5 million but, if sold, would yield $2 million.

Required - Answer the following with supporting citations from the FASB ASC:

a. How does the FASB ASC Glossary define a defensive intangible asset?

b. According to ASC Topic 805, "Business Combinations," what is the measurement principle that an acquirer should follow in recording identifiable assets acquired in a business combination?

c. According to ASC Topic 820, "Fair Value Measurement," what value premise (in-use or in-exchange) should ComWire assign to the M-Tech trade name in its consolidated financial statements?

d. According to ASC Topic 350, "General Intangibles Other Than Goodwill," how should ComWire determine the estimated useful life of its defensive intangible asset?

Reference no: EM133102293

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