Asked by ashok Gadiparthi on Apr 29, 2024
Verified
Which of the following is an intangible asset that is not typically amortized?
A) patent
B) copyright
C) franchise
D) trademark
Intangible Asset
An asset that lacks physical substance and is not financial in nature, which is identifiable and provides economic benefits or advantages to the owner.
Trademark
A symbol, word, or phrase legally registered or established by use as representing a company or product.
Amortized
The process of gradually reducing the cost of an intangible asset or paying off a debt over a period.
- Understand the differences in accounting treatments between different types of intangible assets (e.g., patents, copyrights, franchises, trademarks, goodwill).
- Differentiate between amortizable and non-amortizable intangible assets.
Verified Answer
EE
edgar estradaMay 02, 2024
Final Answer :
D
Explanation :
Trademarks are intangible assets that are not typically amortized. While patents, copyrights, and franchises are typically amortized over their useful lives, trademarks are generally not subject to amortization because their useful lives tend to be indefinite. Instead, companies periodically evaluate their trademarks to determine if any impairment has occurred, requiring a write-down in their value.
Learning Objectives
- Understand the differences in accounting treatments between different types of intangible assets (e.g., patents, copyrights, franchises, trademarks, goodwill).
- Differentiate between amortizable and non-amortizable intangible assets.