Determining the Useful Life of an Intangible Asset


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The useful life of an intangible asset:

Is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of that entity.
To an entity shall be based on an analysis of all pertinent factors, in particular:
        o   The expected use of the asset by the entity.
        o   The level of maintenance expenditures required to obtain the
             expected future cash flows from the asset (for example, a material level of
             required maintenance in relation to the carrying amount of the
             asset may suggest a very limited useful life).
Shall be considered indefinite, if no legal, regulatory, contractual, competitive, economic, or other factors limit the useful life of an intangible asset to the reporting entity. The term indefinite does not mean infinite.

See Paragraph 11 of SFAS 142.