The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be
A)charged off in the current period.
B)amortized over the legal life of the purchased patent.
C)added to factory overhead and allocated to production of the purchaser's product.
D)amortized over the remaining estimated life of the original patent covering the product whose market would have been impaired by competition from the newly patented product.

Question

Quizplus · Accepted Answer

The cost should be amortized over the remaining estimated life of the original patent because the purchase was made to protect the market position of the existing product, and its benefit is tied to the life of the original patent.

The Cost of Purchasing Patent Rights for a Product That