Laboratoires Vireux acquire for 240,000 a licence to use a scientific database, granted for 4 years and renewable once for 4 years. Renewal is automatic, for negligible administrative fees, and the entity has evidence showing that it will obtain it. It plans to use the database for 10 years. The licence is amortised on a straight-line basis, with no residual value. Determine the useful life and the annual amortisation charge.
- Cost of the licence
- 240,000
- Initial contractual term
- 4
- Renewal term
- 4
- Intended period of use
- 10