Because a wireless license does not exist physically, Verizons (VZ) wireless licenses are intangible assets. All of
Question:
Because a wireless license does not exist physically, Verizon’s (VZ) wireless licenses are intangible assets. All of the costs of acquiring a wireless license should be recorded as an asset. In a recent year, Verizon reported almost $95.1 billion of wireless licenses, representing 33% of its total assets.
Even though the FCC license is granted for a 10-year period, Verizon considers this license to have an indefinite useful life. This is because the license is subject to renewal at a low cost and, historically, the FCC has renewed Verizon’s licenses.
Verizon does not expense (amortize) the cost of its wireless licenses. Instead, the licenses are reviewed for any impaired value.
Step by Step Answer:
Financial And Managerial Accounting
ISBN: 9780357714041
16th Edition
Authors: Carl S. Warren, Jefferson P. Jones, William Tayler