When an intangible asset has a finite life, amortization should be taken over what period of time? The shorter of the asset’s useful life or its legal life. The longer of the asset’s useful life or its legal life. According to U.S. GAAP, all costs should be expensed. No amortization should be taken on intangible assets.
When an intangible asset has a finite life, amortization should be taken over what period of time? The shorter of the asset’s useful life or its legal life. The longer of the asset’s useful life or its legal life. According to U.S. GAAP, all costs should be expensed. No amortization should be taken on intangible assets.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
When an intangible asset has a finite life, amortization should be taken over what period of time?
- The shorter of the asset’s useful life or its legal life.
- The longer of the asset’s useful life or its legal life.
- According to U.S. GAAP, all costs should be expensed.
- No amortization should be taken on intangible assets.
Expert Solution
Introduction
Amortization of intangible assets is a process that the cost of such an asset is written off over time.
As per accounting standards intangible assets will be amortization over the useful life of assets.
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