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| Topic: |
Business
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| Number of pages / Number of words: |
7 / 1777 |
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In order to determine the useful life many factors are to be considered: how long the entity is expecting to use the asset, how long a comparable asset has lasted in the company, and legal and economic factors, to name a few. If economic benefits resulting from the asset can be measured then amortization should follow the same pattern...
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However, if the economic benefits are indeterminable then one must use straight-line amortization. The only reason an entity should write-off or write down an asset during the acquisition period is if the asset becomes impaired during that time.
The amount that should be amortized of the intangible asset should be the cost of the asset less any residual value...
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