CERTYNEX IFRS ACADEMY

An entity acquires a licence to exploit a patent for a contractual term of 6 years, not renewable. It plans to use the technology for only 4 years, then replace it with an internally developed solution. What useful life should be used?

6 years, the useful life of a contractual right always being equal to the term of that right.

4 years, the expected period of use, shorter than that of the rights.

An indefinite life, as the technology could be replaced at any time.

5 years, the average of the contractual term and the expected period of use.