An intangible asset with an estimated useful life of30 years was acquired on January 1, 2007, for $540,000.On January 1, 2017, a review was made of intangibleassets and their expected service lives, and it was determinedthat this asset had an estimated useful life of 30more years from the date of the review. What is theamount of amortization for this intangible in 2017?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
An intangible asset with an estimated useful life of
30 years was acquired on January 1, 2007, for $540,000.
On January 1, 2017, a review was made of intangible
assets and their expected service lives, and it was determined
that this asset had an estimated useful life of 30
more years from the date of the review. What is the
amount of amortization for this intangible in 2017?
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