Regulations in effect for bonds acquired before March 2, 1998 (or held before a taxable year containing March 2, 1998) provided that, in determining each year the amount of premium to be amortized
, the basis was adjusted for amortizable premium previously deducted or offset.
cost interest method separately reports the first component--amortized cost interest--but combines the second and third components-the difference between fair value interest and amortized
cost interest and the unexpected gain or loss.
Where goodwill is amortized
over 20 (or fewer) years, impairment reviews must be performed only at the end of the first full year after initial recognition and at other times if circumstances indicate that its carrying value may not be fully recoverable.
And since this "book-up" or additional goodwill no longer needs to amortized
, it causes an increase in earnings per share.
Intangibles with a definite life, other than goodwill, will still be amortized
, while intangibles with indefinite lives will now be tested for impairment annually and on an interim basis when circumstances reduce the fair value below the carrying value.
The loan is to be amortized
quarterly at the current 12% market-rate of interest, and requires interest and principal payments each period of $2,952.37.
Instead, all package design costs incurred during the tax year are capitalized and amortized
ratably over a 48-month period.
The $6,750,000 loan carries a 10-year term amortized
over 30 years and was utilized to purchase the property in a sale leaseback transaction.
At the election of the taxpayer, start-up expenditures and organizational expenditures may be amortized
over a period of not less than 60 months, beginning with the month in which the trade or business begins.
As a result of Statement 142, all existing and newly acquired goodwill will no longer be amortized
but will be tested for impairment annually and written down only when impaired.
It would require that goodwill be amortized
over its useful life; however, the amortization period may not exceed 20 years.
However, if the taxpayer negotiates a new lease for property covered by an old lease, the cancellation payment should be capitalized and amortized
over the life of the new lease.