CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Which is not true of the accounting procedures or the accounting rules applied to intangible assets?
A. Patents have a legal life of 17 years.
B. Generally, the straight-line method of amortization is used on intangible assets.
C. Accumulated amortization accounts are maintained for intangibles.
Explanation: Accumulated amortization accounts are not maintained for intangible assets. The expired portion of the cost of the asset is credited directly to the asset account, just like the treatment for prepaid assets.

User Contributed Comments 7

User Comment
Trex Patent has legal life of 17 years, a design maybe granted for 14 years
CFunder B is written "Generally, the straight line amortization method is used on intangibles." Does generally mean there are one exception or two exceptions? There are indefinite life intangibles which require no amortization. Also, amortization on intangibles (such as development) may be amortized based on revenue which provides better matching.
jpducros This 17 years legal life is typically US specific.
viruss Gosh ! Again with the US centric vision of the world ... it is painful to study this topic for a non US citizen. In my country & others I worked in, intangibles may use contra accounts for their amortization scheme and patents have not a max 17 legal life ... I really hope that this kind of question does not pop up on the exam ;)
bigbros Please! I will like to know the area of the CFA syllabus that specify that patent has legal life of 17 years
farhan92 @viruss Analyst Notes wants us all to move to the states!
ashish100 ummm
maybe its coz the US GDP is about 25% of the world's GDP?

196 countries total. let that sink in
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