How are finite-life intangibles identified in a business combination?

ASC 805 requires recognizing intangibles separately from goodwill if they are separable or arise from contractual rights. Examples: customer lists (5-10 years), developed technology (3-7 years), trade names (5-20 years).

What amortization method is used for intangibles?

Straight-line is most common and required unless a different pattern of economic benefit is demonstrated. Some customer relationship intangibles use accelerated methods if customer attrition is higher in early years.

Does intangible amortization affect cash flow?

No. Amortization is a non-cash expense. It reduces GAAP net income but not cash flow. This is why M&A transactions are often analyzed on an EBITDA basis.

Intangible Asset Amortization Calculator

Calculate amortization schedules for finite-life intangibles acquired in business combinations: customer relationships, technology, trade names, and non-compete agreements.

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Frequently Asked Questions

How are finite-life intangibles identified in a business combination?

What amortization method is used for intangibles?

Does intangible amortization affect cash flow?