How Is the Fair Value Allocation of an Intangible Asset

question 26

Multiple Choice

How is the fair value allocation of an intangible asset allocated to expense when the asset has no legal, regulatory, contractual, competitive, economic, or other factors that limit its life?

• A) Equally over 20 years.
• B) Equally over 40 years.
• C) Equally over 20 years with an annual impairment review.
• D) No amortization, but annually reviewed for impairment and adjusted accordingly.
• E) No amortization over an indefinite period time.

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Definitions:

Corn Future Contract

A standardized legal agreement to buy or sell corn at a predetermined price at a specified time in the future, used as a financial instrument for speculation or hedging.

Spot Price

The current market price at which an asset can be bought or sold for immediate delivery.

Bushel

A unit of volume that is used in agriculture, specifically in the United States, for measuring quantities of grain.