ABC Corp was granted a patent on a product on Jan 1, 1998. To protect its patent, the corporation purchesed on Jan 1, 2007 a patent on a competing patent which was orginally issued on Jan 10, 2003. Because of its unique plant, ABC Corp does not feel the competing patent can be used in producing a product. The cost of the competing patent should be:
a) amortized over a maximum period of 20 years
b) amortized over a maximum period of 16 years
c) amortized over a maximum period of 11 years
d) expensed in 2007
WHICH ONE IS IT???
2007-01-29 11:47:17 · 1 answers · asked by Lady D 3 in Business & Finance ➔ Other - Business & Finance
D. Expensed.
If an asset is impaired in value, as defined by management estimates and projections, then the value should be recorded down to its market value. Since the future market value of the asset is zero (because it can't be used due to its unique equipment needs that the company won't invest in), the entire amount should be expensed.
2007-01-29 12:57:10 · answer #1 · answered by csanda 6 · 1⤊ 0⤋