Copyright

Definition

Copyright is a legal protection granted to the creators of original works, preventing unauthorized use or distribution. It applies to intangible assets like literary, musical, and artistic works, providing exclusive rights for a specified period.

5 Must Know Facts For Your Next Test

1. Copyright is considered an intangible asset on financial statements.
2. It provides economic benefits over its useful life through licensing or sales.
3. Copyrights have a finite useful life but can be renewed depending on jurisdiction.
4. Amortization expense is recorded for copyrights over their useful life.
5. Impairment tests may be required if the future economic benefits of the copyright are in doubt.

Review Questions

• How is copyright classified on financial statements?
• What type of expense is recorded for copyrights over their useful life?
• When might an impairment test be required for a copyright?

Related terms

Trademark: A recognizable sign, design, or expression that identifies products or services and distinguishes them from others.

Patent: An exclusive right granted for an invention, allowing the patent holder to commercially exploit the invention for a certain period.

Goodwill:

An intangible asset that arises when one company acquires another for a premium value due to its brand reputation or customer relationships.