[KNVB]

1. On the 2 step impairment test for intangibles, what does ‘restoration’ mean? Assets held for disposal cannot be restored but held for use assets can. Also, you can depreciate this impairment loss which means you can expense it so it hits the P/L?

2. When an expense is ‘capitalized’ it’s added to the cost basis right? Can you explain this to me? For example, say you are developing software and you have reached tech feasibility so now you can capitalize. Say you incurred $100,000 of expenses that can be capitalized. Where does this $100,000 go? It’s obviously not expensed as yet (not until the software is released), so it is on the B/S? I’m confused as to how you account for ‘capitalized costs’. I know they’re costs that are expensed over time.

Thanks for taking the time to read this. I’m just trying to understand how all this stuff works

FAR - Studying
AUD - 0
REG - 0
BEC - 0

[Lou]

1. Restoration means like returning it out of the HFS category. The reasoning is probably so you can't take a tax loss and then reverse if afterwards.

2. capitalization you have to think journal entries for them to make sense. Debit the asset and credit the cash/AP. The capitalization would be expensed out of the I/S over the life of the asset basically, but initially, its added to the cost basis

FAR- taken 8/11/16....now the wait begins
AUD- scheduled 9/8/16
BEC- scheduled 10/9/16
REG-scheduled 12/10/16

Live a few years like most people won't, to live the rest of your life like most people can't.

[Author]

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