Explain the process of amortisation of an intangible asset?

“Companies amortize intangible assets which are having definite life.”
a. Explain the process of amortisation of an intangible asset?
Your answer should be accompanied with a suitable example. (4 marks)
b. 011 September 1, 2019, Simon Corporation acquired Jumbo Enterprises for a cash payment of OMR 970,520. At the time of purchase, Simon Corporation’s balance sheet showed assets of OMR 520,000, liabilities of OMR 100,000, and owner’s equity of OMR 420,000. The fair value of Jumbo’s assets is estimated to be OMR 620,000. Compute the amount of;
XL Co. can sell the machine to another manufacturer for OMR 50,000. In order to make the sale, XL Co. must incur a transportation cost of OMR 2000.
If XL Co. replaces the machine with a new version, it would cost OMR12O,000.
The cash flows from existing machine are estimated to be OMR 25,000 for the first two years and OMR 20,000 for the remaining 4 years of the machine’s life.
The discount rate at 10 % is: - Year -1 0.909, Year -2 0.826, Years- 3 to 6 inclusive 2.6 19 (annuity rate) Calculate the value of machine under the four methods identified in Q a. (A,,swer should show clear steps and calculations). (8 marks)

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