Final Answer:
D. expensed.Patents, copyrights, and trademarks are typically expensed over their useful lives rather than amortized, depleted, or depreciated.
Therefore, the correct answer is D. expensed.
Step-by-step explanation:
Patents, copyrights, and trademarks, as forms of intellectual property, are not amortized, depleted, or depreciated but rather expensed over time. Each of these intangible assets represents a unique legal right, and their value derives from their ability to provide exclusive rights to their owners. Amortization typically applies to intangible assets with a finite useful life, but intellectual property rights often extend for specific durations, such as the patent's 20-year term.
Expensing involves allocating the cost of these assets over their estimated useful lives. This approach reflects the economic reality that the value of intellectual property diminishes over time due to factors like technological advancements or changing market conditions. By expensing, companies match the cost of acquiring these rights with the revenue they generate, providing a more accurate representation of their financial performance.
Unlike tangible assets subject to depreciation or natural resources subject to depletion, the value of intellectual property isn't physically worn out or consumed. Instead, it's the legal protection and competitive advantage associated with these assets that diminish over time. Therefore, expensing aligns with the economic reality of how the value of patents, copyrights, and trademarks evolves throughout their legal protection periods.