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1- an acquisition cost of $5Million a fair value at December, Year1 of $6Million and a finite life of years
2- another intangible asset with an acquisition cost of $3Million and a fair value of $2Million at December, Year1, for which a life cannot be determined. Question ,
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What amount of intangible amortization should Wright recognize for the year ended December, Year1?
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1- Zero
2-one Hundred Thousand
3-two Hundred Thousand
4-three Hundred Thousand
one Hundred Thousand amortization
answer is : Number 2 , 100,000
Two intangible assets were acquired at the beginning of the year. The first has a finite life and thus should be amortized;
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the second has an indefinite life and cannot be amortized. The second asset looks like it might be impaired, but they did not ask for the impairment loss.
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The acquisition cost of the first intangible asset was $5,000,000. That cost is amortized over the life of 50 years, for an annual amortization of $100,000.
