How should Energy Corporation account for the intangible asset value of the customer lists acquired?

The proper accounting treatment for the intangible asset value of customer lists acquired by Energy Corporation is to record it as an asset and amortize it over its economic life. This approach is in compliance with accounting standards that recognize intangible assets as elements of the company's balance sheet if they provide future economic benefits.

Customer lists represent valuable relationships and marketing advantages obtained through established contacts with customers. By recognizing customer lists as an intangible asset, a company acknowledges the future revenue potential these relationships can generate. Additionally, amortizing the asset over its economic life ensures that the expense is distributed appropriately over the period in which the asset is expected to contribute to revenue generation.

This method aligns with the generally accepted accounting principle of matching, where the cost of the asset is recognized as an expense over time in accordance with the benefits it provides, rather than all at once. Amortization assists in accurately depicting the company's financial position and performance over the reporting periods affected by the asset.