Problem: Newatit Company spent a substantial amount of money organizing and getting ready for business. These costs are considered organization costs.
Required:
Q1. Does the occurrence of organization costs meet the definition of assets?
Q2. If organization costs are assets, would they be considered intangible assets? Explain.
Q3. How should the cost incurred be matched against earnings under current GAAP?
Q4. Some theorists argue that organization costs should not be amortized. Defend this position.