CHAPTER 12 Auditing Long-Lived Assets: Acquisition, Use,

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Impairment, and Disposal
Amortization expense
A process of expensing the acquisition cost minus the residual value of
intangible assets over their estimated useful economic life.
Asset impairment
A term used to describe managements recognition that a significant
portion of fixed assets is no longer as productive as had originally been
expected. When assets are so impaired, the assets should be written
down to their expected economic value.
Depletion expense
Expense associated with the extraction of natural resources.
Intangible Assets
Nonphysical assets, such as patents, trademarks, copyrights, and
brand recognition.
Long-lived assets
Noncurrent assets that are used over multiple operating cycles and
include tangible and intangible assets.
Tangible assets
Assets that have a physical form, such as machinery, buildings, and
land.