{"id":3707,"date":"2020-10-22T04:34:22","date_gmt":"2020-10-22T04:34:22","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-financialaccounting\/?post_type=chapter&#038;p=3707"},"modified":"2020-12-03T21:57:25","modified_gmt":"2020-12-03T21:57:25","slug":"journalizing-entries-for-amortization","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/chapter\/journalizing-entries-for-amortization\/","title":{"raw":"Journalizing Entries for Amortization","rendered":"Journalizing Entries for Amortization"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Record amortization of intangible assets<\/li>\r\n<\/ul>\r\n<\/div>\r\nBy now, you should be able to predict what the journal entry for amortization will look like.\r\n\r\nLet\u2019s look at an example. A patent is a right granted by the federal government. This exclusive right enables the owner to manufacture, sell, lease, or otherwise benefit from an invention for a limited period. The value of a patent lies in its ability to produce revenue. Patents have a legal life of 14\u201320 years.\r\n\r\nWhen purchasing a patent, a company records it in the Patents account at cost. The firm also debits the Patents account for the cost of the first successful defense of the patent in lawsuits (assuming an outside law firm was hired rather than using internal legal staff). Such a lawsuit establishes the validity of the patent and thereby increases its service potential. In addition, the firm debits the cost of any competing patents purchased to ensure the revenue-generating capability of its own patent to the Patents account.\r\n\r\nThe firm would amortize the cost of a purchased patent over its finite life which reasonably would not exceed its legal life. If a patent cost $40,000 and has a useful life of 10 years, the journal entries to record the patent and periodic amortization (assuming a full year) are:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Mar. 1<\/th>\r\n<td>Patent<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">$40,000.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Mar. 1<\/span><\/th>\r\n<td>\u00a0 \u00a0 \u00a0 Checking accounting<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">$40,000.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Mar. 1<\/span><\/th>\r\n<td>To record purchases of patent.<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n&nbsp;\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">May 15<\/th>\r\n<td>Amortization expense<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">$4,000.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">May 15<\/span><\/th>\r\n<td>\u00a0 \u00a0 \u00a0 Patents<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">$4,000.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">May 15<\/span><\/th>\r\n<td>To record annual patent amortization.<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nNotice that we don\u2019t always use a contra account to record amortization of intangibles; however, if we look at the second half of Albemarle\u2019s Note 12 on goodwill and intangibles, we see the company does keep track of amortization separately. Because they are reporting it in the annual report, we can assume they are using separate GL accounts for the accumulated amortization.\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement\"><caption>Other intangibles consist of the following at December 31, 2019 and 2018 (in thousands)<\/caption>\r\n<thead>\r\n<tr>\r\n<th style=\"width: 46%;\" scope=\"col\"><\/th>\r\n<th style=\"width: 12%;\" scope=\"col\">Customer Lists and Relationships<\/th>\r\n<th style=\"width: 14%;\" scope=\"col\">Trade Names and Trademarks [a]<\/th>\r\n<th style=\"width: 11%;\" scope=\"col\">Patents and Technology<\/th>\r\n<th style=\"width: 9%;\" scope=\"col\">Other<\/th>\r\n<th style=\"width: 9%;\" scope=\"col\">Total<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td><span class=\"u-sr-only\">Subcategory, <\/span><strong>Gross Asset Value<\/strong><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Balance at December 31, 2017<\/td>\r\n<td class=\"r\" style=\"text-align: right;\">$ 439,312<\/td>\r\n<td class=\"r\" style=\"text-align: right;\">$18,981<\/td>\r\n<td class=\"r\" style=\"text-align: right;\">$61,618<\/td>\r\n<td class=\"r\" style=\"text-align: right;\">$37,256<\/td>\r\n<td class=\"r\" style=\"text-align: right;\">$557,167<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Foreign currency translation adjustments and other<\/td>\r\n<td style=\"text-align: right;\">(10,940)<\/td>\r\n<td style=\"text-align: right;\">(528)<\/td>\r\n<td style=\"text-align: right;\">(5,817)<\/td>\r\n<td style=\"text-align: right;\">6,452<\/td>\r\n<td style=\"text-align: right;\">(9,483)<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Balance at December 31, 2018<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>428,372<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>18,453<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>55,801<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>43,708<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>546,334<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Foreign currency translation adjustments and other<\/td>\r\n<td style=\"text-align: right;\">(5,910)<\/td>\r\n<td style=\"text-align: right;\">(366)<\/td>\r\n<td style=\"text-align: right;\">(781)<\/td>\r\n<td style=\"text-align: right;\">(2,426)<\/td>\r\n<td style=\"text-align: right;\">(9,483)<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Balance at December 31, 2019<\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$422,462<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$18,087<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$55,020<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$41,282<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$536,851<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><span class=\"u-sr-only\">Subcategory, <\/span><strong>Accumulated Amortization<\/strong><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<td style=\"text-align: right;\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Balance at December 31, 2017<\/td>\r\n<td style=\"text-align: right;\">$(74,704)<\/td>\r\n<td style=\"text-align: right;\">$(8,295)<\/td>\r\n<td style=\"text-align: right;\">$(35,203)<\/td>\r\n<td style=\"text-align: right;\">$(17,462)<\/td>\r\n<td style=\"text-align: right;\">$(135,664)<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Amortization<\/td>\r\n<td style=\"text-align: right;\">(23,402)<\/td>\r\n<td style=\"text-align: right;\">\u2014<\/td>\r\n<td style=\"text-align: right;\">(1,450)<\/td>\r\n<td style=\"text-align: right;\">(3,127)<\/td>\r\n<td style=\"text-align: right;\">(27,979)<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Foreign currency translation adjustments and other<\/td>\r\n<td style=\"text-align: right;\">2,309<\/td>\r\n<td style=\"text-align: right;\">119<\/td>\r\n<td style=\"text-align: right;\">1,405<\/td>\r\n<td style=\"text-align: right;\">(381)<\/td>\r\n<td style=\"text-align: right;\">3,452<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Balance at December 31, 2018<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(95,797)<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(8,176)<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(35,248)<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(20,970)<\/td>\r\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(160,191)<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Amortization<\/td>\r\n<td style=\"text-align: right;\">(23,020)<\/td>\r\n<td style=\"text-align: right;\">\u2014<\/td>\r\n<td style=\"text-align: right;\">(1,388)<\/td>\r\n<td style=\"text-align: right;\">(2,714)<\/td>\r\n<td style=\"text-align: right;\">(27,122)<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Foreign currency translation adjustments and other<\/td>\r\n<td style=\"text-align: right;\">2,068<\/td>\r\n<td style=\"text-align: right;\">238<\/td>\r\n<td style=\"text-align: right;\">439<\/td>\r\n<td style=\"text-align: right;\">2,339<\/td>\r\n<td style=\"text-align: right;\">5,084<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Balance at December 31, 2019<\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(116,749)<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(7,938)<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(36,197)<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(21,345)<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(182,229)<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Net Book Value at December 31, 2018<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$332,575<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$10,277<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$20,553<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$22,738<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$386,143<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Net Book Value at December 31, 2019<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$305,713<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$10,149<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$18,823<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$19,937<\/td>\r\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$354,622<\/td>\r\n<\/tr>\r\n<tr>\r\n<td colspan=\"6\">[a] Net Book Value includes only indefinite-lived intangible assets<\/td>\r\n<\/tr>\r\n<tr>\r\n<td colspan=\"6\">Useful lives range from 13\u201325 years for customer lists and relationships; 8\u201320 years for patents and technology; and primarily 5\u201325 years for other<\/td>\r\n<\/tr>\r\n<tr>\r\n<td colspan=\"6\">Amortization of other intangibles aounted to $27.1 million, $280 million, and $25.1 million for the years ended December 31, 2019, 2018, and 2017 respectively. Included in amortization for the years ended December 31, 2019, 2018, and 2017 is $19.5 million, $19.7 million, and $17.7 million, respectively, of amortization using the pattern of economic benefit method.<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\nAlso, notice they do not amortize trade names and trademarks (nor do they amortize goodwill) because there is no determinable useful life. Note that the company uses the \u201cpattern of benefits\u201d method of calculating amortization (matching the expense to future cash flows\/revenues).\r\n\r\nThe total net book value of other intangibles (historical cost minus accumulated amortization) of $354.622 million at December 31, 2019\u00a0 is equal to the number on the balance sheet. As accountants, it\u2019s imperative that our sub schedules and subsidiary ledger always tie to control accounts.\r\n\r\n[caption id=\"attachment_6171\" align=\"aligncenter\" width=\"1024\"]<img class=\"wp-image-6171 size-large\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/17215939\/Screen-Shot-2020-11-17-at-1.59.28-PM-1024x522.png\" alt=\"See caption for link to long description.\" width=\"1024\" height=\"522\" \/> See the <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Financial+Accounting\/Long+Descriptions\/Albemarle+CBS.txt\" target=\"_blank\" rel=\"noopener\">balance sheet long description<\/a> here.[\/caption]\r\n\r\n<div class=\"textbox tryit\">\r\n<h3>PRACTICE QUESTION<\/h3>\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/23792\r\n\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li style=\"font-weight: 400;\">Record amortization of intangible assets<\/li>\n<\/ul>\n<\/div>\n<p>By now, you should be able to predict what the journal entry for amortization will look like.<\/p>\n<p>Let\u2019s look at an example. A patent is a right granted by the federal government. This exclusive right enables the owner to manufacture, sell, lease, or otherwise benefit from an invention for a limited period. The value of a patent lies in its ability to produce revenue. Patents have a legal life of 14\u201320 years.<\/p>\n<p>When purchasing a patent, a company records it in the Patents account at cost. The firm also debits the Patents account for the cost of the first successful defense of the patent in lawsuits (assuming an outside law firm was hired rather than using internal legal staff). Such a lawsuit establishes the validity of the patent and thereby increases its service potential. In addition, the firm debits the cost of any competing patents purchased to ensure the revenue-generating capability of its own patent to the Patents account.<\/p>\n<p>The firm would amortize the cost of a purchased patent over its finite life which reasonably would not exceed its legal life. If a patent cost $40,000 and has a useful life of 10 years, the journal entries to record the patent and periodic amortization (assuming a full year) are:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Mar. 1<\/th>\n<td>Patent<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">$40,000.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Mar. 1<\/span><\/th>\n<td>\u00a0 \u00a0 \u00a0 Checking accounting<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">$40,000.00<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Mar. 1<\/span><\/th>\n<td>To record purchases of patent.<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">May 15<\/th>\n<td>Amortization expense<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">$4,000.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">May 15<\/span><\/th>\n<td>\u00a0 \u00a0 \u00a0 Patents<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">$4,000.00<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">May 15<\/span><\/th>\n<td>To record annual patent amortization.<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Notice that we don\u2019t always use a contra account to record amortization of intangibles; however, if we look at the second half of Albemarle\u2019s Note 12 on goodwill and intangibles, we see the company does keep track of amortization separately. Because they are reporting it in the annual report, we can assume they are using separate GL accounts for the accumulated amortization.<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement\">\n<caption>Other intangibles consist of the following at December 31, 2019 and 2018 (in thousands)<\/caption>\n<thead>\n<tr>\n<th style=\"width: 46%;\" scope=\"col\"><\/th>\n<th style=\"width: 12%;\" scope=\"col\">Customer Lists and Relationships<\/th>\n<th style=\"width: 14%;\" scope=\"col\">Trade Names and Trademarks [a]<\/th>\n<th style=\"width: 11%;\" scope=\"col\">Patents and Technology<\/th>\n<th style=\"width: 9%;\" scope=\"col\">Other<\/th>\n<th style=\"width: 9%;\" scope=\"col\">Total<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"u-sr-only\">Subcategory, <\/span><strong>Gross Asset Value<\/strong><\/td>\n<td style=\"text-align: right;\"><\/td>\n<td style=\"text-align: right;\"><\/td>\n<td style=\"text-align: right;\"><\/td>\n<td style=\"text-align: right;\"><\/td>\n<td style=\"text-align: right;\"><\/td>\n<\/tr>\n<tr>\n<td>Balance at December 31, 2017<\/td>\n<td class=\"r\" style=\"text-align: right;\">$ 439,312<\/td>\n<td class=\"r\" style=\"text-align: right;\">$18,981<\/td>\n<td class=\"r\" style=\"text-align: right;\">$61,618<\/td>\n<td class=\"r\" style=\"text-align: right;\">$37,256<\/td>\n<td class=\"r\" style=\"text-align: right;\">$557,167<\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Foreign currency translation adjustments and other<\/td>\n<td style=\"text-align: right;\">(10,940)<\/td>\n<td style=\"text-align: right;\">(528)<\/td>\n<td style=\"text-align: right;\">(5,817)<\/td>\n<td style=\"text-align: right;\">6,452<\/td>\n<td style=\"text-align: right;\">(9,483)<\/td>\n<\/tr>\n<tr>\n<td>Balance at December 31, 2018<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>428,372<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>18,453<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>55,801<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>43,708<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>546,334<\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Foreign currency translation adjustments and other<\/td>\n<td style=\"text-align: right;\">(5,910)<\/td>\n<td style=\"text-align: right;\">(366)<\/td>\n<td style=\"text-align: right;\">(781)<\/td>\n<td style=\"text-align: right;\">(2,426)<\/td>\n<td style=\"text-align: right;\">(9,483)<\/td>\n<\/tr>\n<tr>\n<td>Balance at December 31, 2019<\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$422,462<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$18,087<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$55,020<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$41,282<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$536,851<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<\/tr>\n<tr>\n<td><span class=\"u-sr-only\">Subcategory, <\/span><strong>Accumulated Amortization<\/strong><\/td>\n<td style=\"text-align: right;\"><\/td>\n<td style=\"text-align: right;\"><\/td>\n<td style=\"text-align: right;\"><\/td>\n<td style=\"text-align: right;\"><\/td>\n<td style=\"text-align: right;\"><\/td>\n<\/tr>\n<tr>\n<td>Balance at December 31, 2017<\/td>\n<td style=\"text-align: right;\">$(74,704)<\/td>\n<td style=\"text-align: right;\">$(8,295)<\/td>\n<td style=\"text-align: right;\">$(35,203)<\/td>\n<td style=\"text-align: right;\">$(17,462)<\/td>\n<td style=\"text-align: right;\">$(135,664)<\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Amortization<\/td>\n<td style=\"text-align: right;\">(23,402)<\/td>\n<td style=\"text-align: right;\">\u2014<\/td>\n<td style=\"text-align: right;\">(1,450)<\/td>\n<td style=\"text-align: right;\">(3,127)<\/td>\n<td style=\"text-align: right;\">(27,979)<\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Foreign currency translation adjustments and other<\/td>\n<td style=\"text-align: right;\">2,309<\/td>\n<td style=\"text-align: right;\">119<\/td>\n<td style=\"text-align: right;\">1,405<\/td>\n<td style=\"text-align: right;\">(381)<\/td>\n<td style=\"text-align: right;\">3,452<\/td>\n<\/tr>\n<tr>\n<td>Balance at December 31, 2018<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(95,797)<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(8,176)<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(35,248)<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(20,970)<\/td>\n<td class=\"line-single\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>(160,191)<\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Amortization<\/td>\n<td style=\"text-align: right;\">(23,020)<\/td>\n<td style=\"text-align: right;\">\u2014<\/td>\n<td style=\"text-align: right;\">(1,388)<\/td>\n<td style=\"text-align: right;\">(2,714)<\/td>\n<td style=\"text-align: right;\">(27,122)<\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Foreign currency translation adjustments and other<\/td>\n<td style=\"text-align: right;\">2,068<\/td>\n<td style=\"text-align: right;\">238<\/td>\n<td style=\"text-align: right;\">439<\/td>\n<td style=\"text-align: right;\">2,339<\/td>\n<td style=\"text-align: right;\">5,084<\/td>\n<\/tr>\n<tr>\n<td>Balance at December 31, 2019<\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(116,749)<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(7,938)<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(36,197)<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(21,345)<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<td class=\"r line-single line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Single Line<\/span>$(182,229)<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<\/tr>\n<tr>\n<td>Net Book Value at December 31, 2018<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$332,575<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$10,277<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$20,553<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$22,738<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$386,143<\/td>\n<\/tr>\n<tr>\n<td>Net Book Value at December 31, 2019<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$305,713<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$10,149<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$18,823<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$19,937<\/td>\n<td class=\"r line-double\" style=\"text-align: right;\"><span class=\"u-sr-only\">Double Line<\/span>$354,622<\/td>\n<\/tr>\n<tr>\n<td colspan=\"6\">[a] Net Book Value includes only indefinite-lived intangible assets<\/td>\n<\/tr>\n<tr>\n<td colspan=\"6\">Useful lives range from 13\u201325 years for customer lists and relationships; 8\u201320 years for patents and technology; and primarily 5\u201325 years for other<\/td>\n<\/tr>\n<tr>\n<td colspan=\"6\">Amortization of other intangibles aounted to $27.1 million, $280 million, and $25.1 million for the years ended December 31, 2019, 2018, and 2017 respectively. Included in amortization for the years ended December 31, 2019, 2018, and 2017 is $19.5 million, $19.7 million, and $17.7 million, respectively, of amortization using the pattern of economic benefit method.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>Also, notice they do not amortize trade names and trademarks (nor do they amortize goodwill) because there is no determinable useful life. Note that the company uses the \u201cpattern of benefits\u201d method of calculating amortization (matching the expense to future cash flows\/revenues).<\/p>\n<p>The total net book value of other intangibles (historical cost minus accumulated amortization) of $354.622 million at December 31, 2019\u00a0 is equal to the number on the balance sheet. As accountants, it\u2019s imperative that our sub schedules and subsidiary ledger always tie to control accounts.<\/p>\n<div id=\"attachment_6171\" style=\"width: 1034px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-6171\" class=\"wp-image-6171 size-large\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/17215939\/Screen-Shot-2020-11-17-at-1.59.28-PM-1024x522.png\" alt=\"See caption for link to long description.\" width=\"1024\" height=\"522\" \/><\/p>\n<p id=\"caption-attachment-6171\" class=\"wp-caption-text\">See the <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Financial+Accounting\/Long+Descriptions\/Albemarle+CBS.txt\" target=\"_blank\" rel=\"noopener\">balance sheet long description<\/a> here.<\/p>\n<\/div>\n<div class=\"textbox tryit\">\n<h3>PRACTICE QUESTION<\/h3>\n<p>\t<iframe id=\"lumen_assessment_23792\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=23792&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_23792\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-3707\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Journalizing Entries for Amortization. <strong>Authored by<\/strong>: Joseph Cooke. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Accounting Principles: A Business Perspective. <strong>Authored by<\/strong>: James Don Edwards, University of Georgia &amp; Roger H. Hermanson, Georgia State University. <strong>Provided by<\/strong>: Endeavour International Corporation. <strong>Project<\/strong>: The Global Text Project. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":90270,"menu_order":10,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Journalizing Entries for Amortization\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Accounting Principles: A Business Perspective\",\"author\":\"James Don Edwards, University of Georgia & Roger H. Hermanson, Georgia State University\",\"organization\":\"Endeavour International Corporation\",\"url\":\"\",\"project\":\"The Global Text Project\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-3707","chapter","type-chapter","status-publish","hentry"],"part":792,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3707","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/users\/90270"}],"version-history":[{"count":6,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3707\/revisions"}],"predecessor-version":[{"id":6673,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3707\/revisions\/6673"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/parts\/792"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3707\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/media?parent=3707"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=3707"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/contributor?post=3707"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/license?post=3707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}