Question 1: Let’s discuss intangibles, which can be amortized over their useful lives. Please state some examples of intangibles and state their useful lives. An intangible asset is a non-physical asset that has a useful life of greater than one year. Examples of intangible assets are trademarks, customer lists, motion pictures, franchise agreements, and computer software. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life. Examples of intangible assets with identifiable useful lives include copyrights and patents. Intangible assets with indefinite useful lives are reassessed each year for impairment. Trademarks and goodwill are examples of intangible assets with indefinite useful lives. The useful life of an intangible asset may be very long but it is always finite. Uncertainty justifies estimating the useful life of an intangible asset on a prudent basis, but it does not justify choosing a life that is unrealistically short. Useful life is either : ( a) the period of time over which an asset is expected to be used by the enterprise, or (b) The number of production or similar units expected to be obtained from the asset by the enterprise.
Question 1: Let’s discuss intangibles, which can be amortized over their useful lives. Please state some examples of intangibles and state their useful lives.
Question 2: Why do companies issue bonds when they can issue stock? What are the advantages in issuing bonds?