FRS 102 governs the accounting remedy of intangible property. These property, missing bodily substance, signify rights or privileges that generate future financial advantages. Examples embrace patents, logos, and sure growth prices. The query of their most life is essential for figuring out the suitable amortization interval.
The willpower of helpful life impacts monetary statements considerably. A shorter life results in increased amortization expense, lowering earnings within the brief time period however probably offering a extra conservative view of long-term worth. Conversely, an extended life spreads the expense over extra years, boosting near-term earnings however probably overstating the asset’s true value. The historic context exhibits a pattern towards rigorous evaluation and justification of helpful lives, reflecting elevated scrutiny from regulators and traders.
