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AICPA testifies in support of legislation on intangibles.

Leonard Podolin, chairman of the American Institute of CPAs tax executive committee, testified before the Senate Finance Committee in support of legislation to allow the amortization of intangible assets.

Podolin told the committee, "The allowance of intangible asset amortization is a major concern to American businesses, especially service-oriented businesses whose revenues are often dependent on the use of intangible assets (such as know-how, contractual relationships and customer lists) to the same extent manufacturing businesses are dependent on the use of tangible assets, such as machinery." He added, "This area is also a major concern to businesses that must compete with non-U. S.-based companies whose tax laws allow goodwill and other intangibles to be amortized."

Podolin expressed the AICPA's continued support for the amortization of intangibles legislation passed by Congress on March 20, 1992, as part of the tax simplification process. However, he called for one final revision concerning the tax treatment of gains and losses generated by the disposition of intangible assets acquired in the purchase of a trade or business. (For more on intangibles, see "Deducting the Cost of Intangibles," by Danny P. Hollingsworth and Walter T. Harrison, Jr., this issue, pages 85-90.) He also urged the committee to consider providing different amortization periods for different categories of assets in various industry groups, much like depreciation rules for tangible assets.
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Jul 1, 1992
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