1. Capital Assets

5. Example Step 2: Amortization Expense = $.25 per shoe × 7,000 shoes = $1,750 Step 1: Amortization Per Unit = $10,000 - $1,000 36,000 units = $.25 per shoe

6. Amortization: Double-Declining Balance Method Step 1: Step 2: Step 3: Double- declining- balance rate = 2 × Straight - line amortization rate Amortization expense = Double- declining- balance rate × Beginning period book value Ignores salvage value until later in life Straight - line amortization rate = 100 % Useful life in years

7. Example Step 1: Step 2: Step 3: Amortization expense = 40% × $10,000 = $4,000 Double-declining- balance rate = 2 × 20% = 40% Straight-line amortization rate = 100 % 5 years = 20%

8. Example Continued 2001 Amortization: 2002 Amortization: 40% × $10,000 = $4,000 40% × $6,000 = $2,400 $10,000 - $4,000

20. Intangible Assets Non-current assets without physical substance. Useful life is often difficult to determine. Usually acquired for operational use. Intangible Assets Often provide exclusive rights or privileges.