Asked by Angela Trevino on May 27, 2024
Verified
The amortization period for a patent is
A) indefinite; patents should be reviewed for impairment annually
B) 20 years
C) 20 years or the expected useful life of the patent, whichever is longer
D) 20 years or the expected useful life of the patent, whichever is shorter
Amortization Period
The amortization period is the duration over which an intangible asset's cost is gradually expensed or written off through systematic charges to income.
Impairment
The reduction in recoverable value of a fixed asset or goodwill below its carrying amount on the balance sheet, leading to a charge against earnings.
- Develop an understanding of the GAAP framework for the recognition of research and development expenses, patent costs, and other intangible expenditures.
Verified Answer
AH
Ayden HowellMay 27, 2024
Final Answer :
D
Explanation :
The amortization period for a patent is the shorter of its legal life (typically 20 years) or its expected useful life. This ensures that the cost of the patent is expensed over the period it is expected to generate revenue.
Learning Objectives
- Develop an understanding of the GAAP framework for the recognition of research and development expenses, patent costs, and other intangible expenditures.