An intangible asset is an asset that lacks physical substance but has value due to its legal rights or expected economic benefits. Some intangible assets have finite useful lives (e.g., copyrights, patents) and are amortized, while others have indefinite useful lives and are not amortized but tested for impairment.
* (A) Underground oil deposits. #
* Incorrect. Oil deposits are natural resources, not intangible assets. They are classified as depletable assets because their value declines as they are extracted.
* (B) Copyright. #
* Incorrect. A copyright grants exclusive rights to reproduce and distribute creative works, but it has a finite legal life (typically 50-100 years, depending on jurisdiction). It is amortized over time.
* (C) Trademark. #
* Correct. A trademark (e.g., a company's logo or brand name) is considered an indefinite-life intangible asset because it can be renewed indefinitely as long as the business continues to use it and follows renewal requirements.
* According to IIA GTAG - "Auditing Intangible Assets", trademarks are subject to impairment testing, but they are not amortized unless their useful life becomes definite.
* (D) Land. #
* Incorrect. Land is a tangible asset, not an intangible one. While it has an indefinite life, it does not fit the category of intangible assets.
* IIA GTAG - "Auditing Intangible Assets"
* IIA Standard 2130 - Control Activities (Asset Management)
* IFRS and GAAP Guidelines - Indefinite and Finite-Lived Intangible Assets Analysis of Answer Choices:IIA References:Thus, the correct answer is C (Trademark), as trademarks have indefinite lives unless there is evidence to the contrary.