Question: Amazon Data for the year ended December 31, 2023: Item Amount Intangible Assets Cost $50,000,000 Accumulated Amortization $20,000,000 Estimated Remaining Useful Life 4 years Annual

Amazon Data for the year ended December 31, 2023:

Item

Amount

Intangible Assets Cost

$50,000,000

Accumulated Amortization

$20,000,000

Estimated Remaining Useful Life

4 years

Annual Amortization Expense

$5,000,000

  1. Calculate the book value of intangible assets.
  2. Determine the new amortization expense if the remaining useful life is reduced to 3 years.
  3. Discuss the financial statement impact of this change in estimate.
  4. Explain how the Conservatism Principle justifies changes in amortization expense.
  5. How should Amazon record the change in amortization expense?

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