9/4 - Instagram Post Solution

5 years

Intangible assets (patents, copyrights) should always be amortized over their economic life rather than their remaining legal life. As accountants, we only care if an asset is an economic resource for us. Once it's no longer an economic resource, it should be taken off the books.

If an industry is going through rapid changes in technology, it's likely a patent that is legally valid for twenty years will become economically obsolete long before that maturity date.

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