Unformatted text preview: exceed 5 years unless a longer period, not exceeding 20
years, can be justified. In any event, intangible assets linked to human resources should not
be amortized over more than 5 years.
Purchased goodwill is amortized over its useful economic life. The maximum useful life is 40
The cost of intangible assets is amortized by systematic charges to income over the period
estimated to be benefited, but not to exceed 40 years (APB-17, par. 29).
The straight-line method of amortization is required unless a company demonstrates that
another systematic method is more appropriate (APB-17, par. 30).
Supra-National Accounting Organizations
IAS 38 requires that an intangible asset should be amortized on a systematic basis over the
best estimate of its useful life. There is a rebuttable presumption that the useful life of an
intangible asset will not exceed 20 years from the data when the asset is available for use.
IAS 38 does not permit an enterprise to assign an infinite useful life to an intangible asset.
Amortization should commence when the asset is available for use.
In rare cases, there may be...
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