ANSWER IN YOU OWN WORDS!

Part a, b, c, d, and e are scenarios that are part of the same question.

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Determining the useful life of an intangible asset should generally be based on the lesser of managements estimate of the period of time over which it is expected to produce benefits (such as cash flows), legal, regulatory, or market-related factors (obsolescence, competition, etc.) that may limit its useful life. What useful life would you estimate for the following intangible assets?

a. An acquired customer list. A direct-mail marketing company acquired the customer list and expects that it will be able to derive benefit from the information on the acquired customer list for at least one year but for no more than three years.

b. An acquired Patent that expires in 15 years. The product protected by the patented technology is expected to be a source of cash flows for at least 15 years. The reporting entity has a commitment from a third party to purchase that Patent in 5 years for 60 percent of the fair value of the Patent at the date it was acquired, and the entity intends to sell the Patent in 5 years.

c. An acquired copyright that has a remaining legal life of 50 years. An analysis of consumer habits and market trends provides evidence that the copyrighted material will generate cash flows for approximately 30 more years.

d. An acquired broadcast license that expires in five years. The broadcast license is renewable every 10 years if the company provides at least an average level of service to its customers and complies with the applicable Federal Communications Commission (FCC) rules and policies and the FCC Communications Act of 1934. The license may be renewed indefinitely at little cost and was renewed twice prior to its recent acquisition. The acquiring entity intends to renew the license indefinitely, and evidence supports its ability to do so. Historically, there has been no compelling challenge to the license renewal. The technology used in broadcasting is not expected to be replaced by another technology any time in the foreseeable future. Therefore, the cash flows from that license are expected to continue indefinitely.

e. An acquired trademark that is used to identify and distinguish a leading consumer product that has been a market-share leader for the past eight years. The trademark has a remaining legal life of 5 years but is renewable every 10 years at little cost. The acquiring entity intends to continuously renew the trademark, and evidence supports its ability to do so. An analysis of product life cycle studies; market, competitive, and environmental trends; and brand extension opportunities provides evidence that the trademarked product will generate cash flows for the acquiring entity for an indefinite period of time.