Below Are Several Intangible Assets

question 81

Essay

Below are several intangible assets. For each case suggest whether the item should be amortized. If amortization is recommended, what is the useful life that it should be amortized over? Provide justification for your recommendation.
a. Aye Corp purchased a brand name for $1,000,000. The firm has the exclusive right to use this name forever.
b. Bee Corp has developed a strong corporate reputation and its products are highly sought-after in the luxury goods market. Last year, $40,000,000 was spent on advertising its brand in top-tier fashion magazines and at the top fashion shows around the world.
c. Cee Corp paid $25,000,000 for the five-year exclusive privilege to have a famous celebrity endorse and use the company's sports equipment. This contract entitles Cee to renew the contract for a further two-year exclusive endorsement arrangement for a fixed fee of $10,000,000, due midway through the last year of the current contract.

---

Definitions:

Population Health Promotion

Involves strategies and interventions aimed at improving the health outcomes of a population group by addressing and preventing underlying causes of ill health.

Improving Health

The process of enhancing or restoring physical, mental, or emotional well-being through medical, psychological, or lifestyle interventions.

Government Action

Decisions or measures taken by governing bodies to address public issues, enforce laws, or influence a country's or area's affairs.

Population Health

The study and improvement of the health outcomes of a group of individuals, focusing on the distribution of those outcomes within the population.