Page 12 - 2018 Finac1 Test 3 Class Slides - 2. Intangible Assets

TEST 3 PREPARATION

Definitions - 38.08

• Amortisation is the systematic allocation of the

depreciable amount of an intangible asset over its useful
life.

• Depreciable amount is the cost of an asset, or other

amount substituted for cost, less its residual value.

• Useful life is:

• the period over which an asset is expected to be available for

use by an entity, or

• the number of production or similar units expected to be
obtained from the asset by the entity.

• Residual value of an intangible asset is the estimated

amount that an entity would currently obtain from

disposal of the asset, after deducting the estimated costs

of disposal, if the asset was already at the age and the
condition expected at the end of its useful life.

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