What is Finite-lived intangible asset?
In short
A finite-lived intangible asset, such as a patent or customer list, is amortized over its useful life, usually straight-line unless another pattern better reflects how its benefits are used up.
Key takeaways
- The useful life is the shorter of its legal life and its expected economic life.
- Legal fees to successfully defend a patent are capitalized and amortized over its remaining life.
- It is tested for impairment like other long-lived assets held and used.
Where it's tested
FAR: Intangible Assets & Goodwill — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
How is a patent with a legal life of 20 years but an expected useful life of 8 years amortized?