Abstract The article presents a discussion on the process of accounting for intangible assets in the United States. The primary U.S. accounting standard for intangibles is Intangible Assets, Accounting Principles Board (APB) Opinion No. 17 (AICPA 1970). On the issue of asset recognition, APB 17 specifies that the costs of all intangibles purchased from others should be recognized as assets. These include "identifiable" intangibles. In contrast costs of developing intangibles that are not identifiable or that have indeterminate lives are to be recognized immediately as expenses. Current U.S. accounting standards for intangibles are generally consistent with a very simple rule. In the case of purchased intangibles, current standards suggest that the future benefits are sufficiently "probable" to meet the definition of an asset. Two additional factors appear to have had an important influence on the present dividing line between expenditures that are capitalized and those that are expensed. The dividing line between intangibles that are capitalized and amortized and those that are expensed immediately might be quite different if standard setters had applied asset recognition criteria at a high level of aggregation.
Jennings et al. (1996) studied this question.