Calculating impact of estimated useful lives of assets

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Question - Calculating the Impact of Estimated Useful Lives of Intangible Assets

Amazon, Alphabet, and TripAdvisor 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 2015 annual reports.

Type of Intangible Asset

Amazon

Alphabet, Inc.

TripAdvisor, Inc.

Developed Technology

3.9

4.1

2.0

Trade Names

4.4

8.6

10.0

Customer Relationships

3.6

4.0

6.0

Assume each company spent $319,800 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 company's Income from Operations in the current year.

Reference no: EM132178867

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