Is a straigh-line amortization basis for trademarks required under U.S GAAP ? or is another method required ?
Under U.S. Generally Accepted Accounting Principles (GAAP), a straight-line amortization basis is not required for trademarks. Instead, the method used for the amortization of trademarks would depend on their estimated useful lives.
The Financial Accounting Standards Board (FASB) provides guidance on accounting for intangible assets, including trademarks, through the Accounting Standards Codification (ASC) 350-30. The ASC allows for a variety of amortization methods, including straight-line, accelerated, or even no amortization if the asset has an indefinite useful life.
To determine the appropriate method, companies need to assess whether the trademark has a finite or indefinite useful life. If a trademark has a finite useful life, the company would typically amortize its value over that estimated life. For instance, if a company estimates a trademark to have a useful life of 10 years, they would allocate the cost of the trademark over those 10 years.
It's important to note that the specific circumstances of each company and their individual assessment of the trademark's useful life may result in different amortization methods. Companies should consider factors such as market conditions, the expected lifespan of the trademark, and any legal or contractual limitations.