Question

In: Accounting

List the period of amortization, if any, for the following four types of Intangible assets. If...

List the period of amortization, if any, for the following four types of

Intangible assets. If there is no period of amortization, please briefly

(1-2 sentences) explain why.

Patents

Copyrights

Trademarks

Goodwill

Solutions

Expert Solution

Country of accounting is not given (So answered the given question keeping in mind mostly followed accounting policies & principles)

1. Patents - Patents are amortized over its useful life (economic life) and not legal life. In most countries, patents have legal life of 20 years but the useful life may be shorter than that.

2. Copyright - Copyright is amortized over its useful life. The copyright have a longer legal life but the revenue will be generated only during its useful life, so it must be amortized only during it's useful life.

3. Trademark - It will not be amortized. In general, Trademarks are registered for certain period and is eligible for renewal. It is expected in the business world that the trademark will be renewed for indefinite period. So assets with indefinite period will not be amortized. (If it is certain that the trademark will not be renewed further, then it will be amortized during its life)

4. Goodwill - Goodwill is not amortized but subjected to impairment (as per IFRS). At every year end the goodwill is tested for impairment and any impairment loss is recognised.

Note :

If you have any doubts, please mention in comments section

ekkarill92 answered 1 year ago
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