Patents are amortized over a period:

Question

Quizplus · Accepted Answer

Patents are amortized over a period of 20 years or the expected useful life, whichever is less, according to Generally Accepted Accounting Principles (GAAP). This means that the asset is gradually written off over time, reflecting the diminishing value and usefulness of the patent. Option A is incorrect since patents generally have a maximum lifespan of 20 years from the date of filing, so 40 years would exceed this limit. Option C is incorrect since there is no requirement for patent amortization period to exceed 40 years. Option D is incorrect since patents are not expensed immediately, but rather are capitalized and amortized over a period of time.

Patents Are Amortized Over a Period