Depreciation Of Intangible Fixed Assets
The process of depreciation of fixed assets is called amortization. The useful life of intangible assets, in accordance with the stipulated rules or regulations. If an intangible fixed asset is issued by the government then the period of validity of the asset shall be determined by the government in accordance with government regulations. For example patent validity period within 15 years.
The amortization calculation is usually done on a straight-line basis. In this case the residual value after the useful life of the asset is exhausted is zero (S = 0), so, The depreciation expense formula annually is:
Formula of Depreciation of Intangible Fixed Assets
Information :
A = the cost of intangible fixed assets
n = validity period of intangible fixed assets
Example Question of Depreciation of Intangible Fixed Assets
The coal mining company has been granted a 15-year coal mining license with a $ 150,000,000 licensing fee. Please specify the annual depreciation charge of the patent!Answer:
A = $150,000,000
n = 15years
Similarly this article.
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The end of word wassalamualaikum wr. wb
Referensi :
- To'Ali's book math group accounting and sales
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