Asked by Estefanie Estupinan on May 04, 2024
Verified
If an acquired franchise or licence is for an indefinite time period, then the cost of the asset should not be amortized.
Indefinite Time
Indefinite Time indicates a period without a specified end date.
- Determine the circumstances in which an asset undergoes depreciation or amortization, covering both leasehold enhancements and intangible assets.
Verified Answer
CH
Cornecia HamptonMay 11, 2024
Final Answer :
True
Explanation :
When a franchise or license is acquired for an indefinite time period, it is considered to have an indefinite useful life. According to accounting standards, assets with indefinite useful lives are not amortized but are tested annually for impairment.
Learning Objectives
- Determine the circumstances in which an asset undergoes depreciation or amortization, covering both leasehold enhancements and intangible assets.