Practice prompt · Q:intangibles-research-software-and-goodwill/intangible-life-sorting-001

Sort intangibles by what their life requires

Tests whether the learner routes intangible assets to amortization or to impairment testing using the life criterion.

Updated Aug 18, 2026 Review due Nov 18, 2026

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A trademark renewable indefinitely at little cost is the standard example of an indefinite life. If the company later decides to let the registration lapse in six years, the life becomes finite and amortization starts from that point forward.

Choose the best answer. a An asset with a finite useful life is amortized over that life; one with no foreseeable limit on the period it will generate cash flows is not amortized and is tested for impairment. b Every intangible asset is amortized, over forty years if no shorter life is evident. c Only intangibles acquired in a business combination are amortized; those bought separately are tested for impairment. d An indefinite-lived intangible is never reassessed, because its life has already been determined to be unlimited.

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Answer: a

Choice a. Finite life means amortization; indefinite life means annual impairment testing and reassessment of the life.