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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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What is the proper time or time period over which to amortize an intangible asset if there is no forseeable limit on the period of time over which the intangible assets is expected to be used in operations?

  1. a. 40 years
  2. b. 50 years
  3. c. immediately
  4. d. not amortized

To determine

Identify the correct option for the given statement.

Explanation

Intangible assets: These are the long-term assets which are not physical in nature, but possess value. The intangible assets would be amortized over their definite useful life or limited useful life, and those with indefinite or unlimited lives are not amortized.

Amortization: Amortization is a process in which the cost of intangible assets is spread equally over the limited or definite useful life of asset.

Justification for correct answer:

Intangibles with an indefinite life: The ...

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