Trademark

Definition

A trademark is a recognizable sign, design, or expression that distinguishes products or services of one source from those of others. It is considered an intangible asset and provides legal protection against unauthorized use.

5 Must Know Facts For Your Next Test

1. A trademark can be a logo, brand name, slogan, or any other distinctive mark.
2. Trademarks are classified as intangible assets on the balance sheet.
3. Costs associated with acquiring a trademark are capitalized and amortized over its useful life.
4. Trademark protection is typically obtained through registration with governmental authorities.
5. The value of a trademark can increase over time based on brand recognition and market presence.

Review Questions

• What types of marks can qualify as trademarks?
• How are trademarks recorded in financial statements?
• Why is it important for companies to register their trademarks?

Related terms

Intangible Asset: An asset that lacks physical substance but has value due to its intellectual property or rights.

Goodwill: An intangible asset that represents the excess purchase price paid over the fair value of an acquired company's net identifiable assets.

Amortization: The process of gradually writing off the initial cost of an intangible asset over its useful life.