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Amortization of Intangible Assets. To illustrate the amortization of an intangible asset, imagine XYZ Biotech spends $30 million dollars on a patent with a useful life of 15 years. Theoretically, to account for the expense over a 15-year period, XYZ Biotech records $2 million each year as an amortization expense.
This determines the period of amortization for implementation costs. In the sample project, the expected life span of the system before replacement or major upgrade is expected to be four years (48 months). Monthly Sales: Enter the number of units sold on a monthly basis.