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It’s the same for movies, other intangible assets that are valuable and produce income over several years. And it’s done for many tangible goods, like servers i
by gnopgnip 1y ago
It’s the same for movies, other intangible assets that are valuable and produce income over several years. And it’s done for many tangible goods, like servers in a datacenter, the kitchen equipment in a restaurant.
- Schiendelman 1y agoI think you may misunderstand. For most of those, you get the choice to amortize if you prefer. In this instance, you must amortize, which is a big problem for startups.
- gnopgnip 1y agoGenerally it’s not a choice. Valuable assets are required to be amortized over their useful life with limited exceptions
- rpeden 1y agoFor the tangible ones, it's often relatively easy to get financing that lets you spread the payment over the asset's useful life, which solves most of the cash flow issues you get if you pay in cash up front but have to spread the expense over many years.
- Schiendelman 1y agoYour previous comment mixed tangible and intangible. R&D is intangible, so I focused there. Your response mostly applies to tangible. I think the other reply to you here makes a great point. Let's try not to talk past each other!
- gnopgnip 1y agoValuable assets includes both tangible and intagible, it applies to both
- Schiendelman 1y agoCan you help me understand what you're arguing?