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29 July, 15:14

Northstar Co. acquired a registered trademark for $600,000. The trademark has a remaining legal life of five years, but can be renewed every 10 years for a nominal fee. Northstar expects to renew the trademark indefinitely. What amount of amortization expense should Northstar record for the trademark in the current year

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  1. 29 July, 18:33
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    The trademark can not be amortized as its life is indefinite

    Explanation:

    The international accounting standard IAS 38 Intangible assets says that the intangible assets must be amortized over its useful life and if the useful life of an asset is indefinite (Just like land) then the assets must not be amortized. So the amortization charge will be zero.
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