Final answer:
The statement about amortizing the cost of a covenant not to compete for 20 years over a 15-year period is false; it should be amortized over 15 years regardless of its actual duration.
Step-by-step explanation:
The statement that the cost of a covenant not to compete for 20 years incurred in connection with the acquisition of a business is amortized over 15 years is false. According to the Internal Revenue Code (IRC), specifically Section 197, intangible assets acquired in connection with the purchase of a business should generally be amortized over a 15-year period.
However, the amortization period is irrespective of the actual duration of the covenant. Therefore, even if the covenant is for 20 years, the amortization period would still be 15 years. This is an important consideration for accounting and tax purposes when handling the financial aspects of a business acquisition.