Question
Amazon, Google, and LinkedIn rely on various intangible assets to operate their businesses. These companies amortize the cost of these assets using the straight-line method
Amazon, Google, and LinkedIn rely on various intangible assets to operate their businesses. These companies amortize the cost of these assets using the straight-line method over the following average estimated useful lives (in years), as reported in their 2013 annual reports. |
Type of Intangible Asset | Amazon.com | Google Inc. | LinkedIn Corp. |
Developed Technology | 4.4 | 8.1 | 2.2 |
Trade Names | 3.0 | 5.3 | 1.9 |
Customer Relationships | 2.4 | 6.5 | 3.4 |
Assume each company spent $784,080 at the beginning of the current year for additional Developed Technology. Because of its proprietary nature, the technology is estimated to have no residual value at the end of its estimated life. |
Required: |
Calculate the impact (direction and amount) that the amortization of such expenditures would have on each companys Income from Operations in the current year. (Decreases should be indicated by a minus sign.) |
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