IntangibleAssetsAmortization expense for an intangible assetcan be written off directly against the assetaccount rather than held in an accumulatedamortizationaccount.Assets with an indefinite useful lifeare not amortized.All intangible assets are subject to impaiment
Intangible Assets: PatentsPatents are federal governmentgrantsThey give the holder the right toproduce and sell an invention.Suppose a company pays $170,000to acquire a patent on January lThe company believes that itsexpected useful life is 5 years
Intangible Assets: PatentsJanuary1Patents170,000Cash170,000To acquire a patentDecember3134,000Amortization Expense34,000PatentsTo amortize the cost of a patent
Intangible Assets: CopyrightsLiterary compositions (novels)Musical compositionsFilms (movies)SoftwareOther works of artCopyrights extend 50 yearsbeyond the author's life
Intangible Assets: TrademarksTrademarks, Trade Names, orBrand Names are assets thatrepresent distinctive identificationsof a product or service