a. How does the FASB ASC Glossary define a defensive intangible asset?

According to the FASB glossary: A Defensive Intangible Asset is “an acquired intangible asset in a situation in which an entity does not intend to actively use the asset but intends to hold (lock up) the asset to prevent others from obtaining access to the asset.”

ASC 350-30-25-5

Recognition

9 FASC A defensive intangible asset should be accounted for as a separate unit of accounting. It

should not be included as part of the cost of an entity's existing intangible asset(s) because the

defensive intangible asset is separately identifiable.

http://www.accountingweb.com/blogs/lindacavanaugh/eitf-08-7-accounting-defensive-

intangible-assets

b. According to ASC Topic 806 Business Combinations, what is the measurement principles that an acquirer should follow in recording identifiable assets acquired in a business combination?

Measuring the Fair Value of a Noncontrolling Interest in an Acquiree

FASC Updates 30-7   Paragraph 805-20-30-1 requires the acquirer to measure a noncontrolling interest in the acquiree at its fair value at the acquisition date. An acquirer sometimes will be able to measure the acquisition-date fair value of a noncontrolling interest on the basis of a quoted price in an active market for the equity shares (that is, those not held by the acquirer). In other situations, however, a quoted price in an active market for the equity shares will not be available. In those situations, the acquirer would measure the fair value of the noncontrolling interest using another valuation technique.

> Measurement Principle ASC 805-20-30-1

30-1  Measurement principle that an acquirer should follow in recording identifiable asset: The acquirer shall measure the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their acquisition-date fair values .

Retrieved: http://josefrashty.com/uploads/2/8/9/2/2892636/2011-03_def._rev._tcpaj.pdf

http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Content/Articles/AERS/Accounting-Standards-Communications/us_assur_Business_Combinations_Roadmap1209.pdf

c. According to ASC Topic 820 Fair Value Measurement, what value premise (in-use or in-exchange) should Ahorita assign to the Z-Tech trade name in its consolidated financial statements?

35-10A   A fair value measurement of a nonfinancial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use (The asset is at

the current fair value of $2 million) or by selling it to another market participant that would use the asset in its highest and best use.  35-10C   Highest and best use is determined from the perspective of market participants, even if the reporting entity intends a different use. However, a reporting entity’s current use of a nonfinancial asset is presumed to be its highest and best use unless market or other factors suggest that a different use by market participants would maximize the value of the asset. ASC 820-10-35-10.

Retrieved: https://asc.fasb.org/imageRoot/00/7534500.pdf 

d. According to ASC Topic 350 General Intangibles Other than Goodwill, how should Ahorita determine the estimated useful life of its defensive intangible asset?

ASC 350-30-35-A A defensive intangible asset shall be assigned a useful life that reflects the entity's consumption of the expected benefits related to that asset. The benefit a reporting entity receives from holding a defensive intangible asset is the direct and indirect cash flows resulting from the entity preventing others from realizing any value from the intangible asset (defensively or otherwise). An entity shall determine a defensive intangible asset's useful life, that is, the period over which an entity consumes the expected benefits of the asset, by estimating the period over which the defensive intangible asset will diminish in fair value. The period over which a defensive intangible asset diminishes in fair value is a proxy for the period over which the reporting entity expects a defensive intangible asset to contribute directly or indirectly to the future cash flows of the entity. 35-5B  It would be rare for a defensive intangible asset to have an indefinite life because the fair value of the defensive intangible asset will generally diminish over time as a result of a lack of market exposure or as a result of competitive or other factors. Additionally, if an acquired intangible asset meets the definition of a defensive intangible asset, it shall not be considered immediately abandoned.

Retrieved:

http://www.deloitte.com/assets/DcomUnitedStates/Local%20Content/Articles/AERS/Accounting-Standards-Communications/us_assur_Business_Combinations_Roadmap1209.pdf