Final answer:
The correct statement is that intangible assets with unlimited or indefinite lives owned by public companies are not amortized. These are instead tested for impairment. Other options provided contain inaccuracies regarding the treatment of intangible assets and inventory items. Therefore correct option is D
Step-by-step explanation:
The correct statement among the options given is that intangible assets owned by public companies and that have unlimited or indefinite lives are not amortized. Amortization is the systematic allocation of the cost of an intangible asset over its useful life. However, for intangible assets with indefinite lives such as trademarks, they are not amortized because their service potential is not expected to diminish over time. Instead, these assets are tested annually for impairment.
It is inaccurate to state that impairment losses are never reported for intangible assets because even intangible assets subject to amortization may still incur impairment losses if their carrying amount exceeds the recoverable amount. Regarding inventory items, only those expected to be sold, used, or consumed within one year (or the operating cycle, if longer) are considered current assets. Items not expected to be sold within this time frame may be classified differently, but they are not automatically long-lived assets.
Finally, not all long-lived intangible assets must be amortized over a period of 40 years or less; this period depends on the asset's estimated useful life, which can vary significantly.