Studio Ondine acquires for 350,000 the right to exploit a film catalogue commercially for 10 years. At expiry, the right can be extended, but only against payment of a new price negotiated on market terms. Studio Ondine expects to exploit the catalogue for 12 years. The right is amortised on a straight-line basis, with no residual value. What are the useful life of the right and its annual amortisation charge?
- Cost of the exploitation right
- 350,000
- Contractual term of the right
- 10
- Intended period of exploitation
- 12