ABC Co purchased a patent on 31 December 20X5 for $375,000.
ABC Co expects to use the patent for eight years, after which it will be valueless. According to IAS 38 Intangible assets, what amount will be amortised in ABC Co’s statement of profit or loss and other comprehensive income for the year ended 31 December 20X6?
Answer
The patent should be amortised over its useful life of 8 years.
(375,000-0) /8 = $46,875