Fair value accounting revolutionizes intangible assets and goodwill valuation methods.
The article discusses how intangible assets and goodwill are accounted for in financial statements. Intangible assets are assets without physical form that can generate future income, while goodwill represents the excess of an acquired entity's cost over its assets and liabilities. Research costs for intangible assets are expensed immediately. Under U.S. GAAP, intangible assets are initially recorded at fair value, usually reflecting the purchase price or development costs.