Accounting for intangible assets;

              Accounting Research BULLETINS
Issued by the mittee ON Accounting Procedure, American Institute of Accountants, 270 Madison Avenue, New York 16, N. Y.
Copyright 1944 by American Institute of Accountants
December, 1944
No. 24
Accounting for Intangible Assets
THIS bulletin deals with some of the problems involved in account-ing for certain types of assets classified by accountants as intangi-bles, including those acquired by the issuance of securities as well as those purchased for cash. Such assets may be purchased or acquired separately at a specified price or consideration, or may be purchased or acquired, together with other assets, for a lump-sum price or con-sideration, without specification by either the seller or the pur-chaser at the time of purchase, of the portion of the total price which is applicable to the respective assets thus acquired. The bulletin does not deal with the problems of accounting for intangibles de-veloped in the regular course of business by research, experimenta-tion, advertising, or otherwise.
The intangibles herein considered may be broadly classified as follows:
(a) Those having a term of existence limited by law, regulation, or agreement, or by their nature (such as patents, copyrights, leases, licenses, franchises for a fixed term, and goodwill as to which there is evidence of limited duration).
(b) Those having no such limited term of existence and as to which there is, at the time of acquisition, no indication of limited life (such as goodwill generally, going value, trade names, secret processes, subscription lists, perpetual franchises, and organization costs).
(c) The excess of a parent company's investment in the stock of a subsidiary over its equity in the net assets of the subsidiary as shown by the latter's books at the date of acquisition, in so far as that excess would be treated as an intangible in consolidated finan-cial statements of the parent and the subsidiary. This class of asset may represent intangibles of either type (a) or type (b) above or a combination of both.
The intangibles described above will hereinafter be referred to as type (a) and (b) intangibles, respectively.
SUMMARY STATEMENT
(1) The initial carrying value of all types of intangibles should be cost, in accordance with the generally accepted accounting prin-
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