Asked by Brandon McMahon on Jun 24, 2024
Verified
Intangible assets with definite useful lives should be amortized:
A) over their useful lives.
B) over the time periods provided under IAS 36 Impairment of Assets which prescribes amortization periods for different classes of assets.
C) under the applicable capital cost allowance rates provided by the Canada Revenue Agency.
D) over two years.
IAS 36
An International Accounting Standard that prescribes the procedures for accounting for impairments of assets.
Amortized
The gradual reduction of a debt or capital cost over a period, especially through regular payments covering interest and part of the principal.
Intangible Assets
Non-physical assets owned by a business, such as patents, trademarks, copyrights, and goodwill, which have economic value due to their rights or advantages in business operations.
- Understand the amortization of intangible assets with definite useful lives and impairment testing.
Verified Answer
DT
Dharsaka TennekoonJun 26, 2024
Final Answer :
A
Explanation :
Intangible assets with definite useful lives should be amortized over their useful lives. This means that the cost of the asset is systematically allocated over the period of time that it is expected to provide economic benefit to the entity. The amortization expense is recognized in the income statement and reduces the carrying amount of the asset on the balance sheet.
Learning Objectives
- Understand the amortization of intangible assets with definite useful lives and impairment testing.