Autocars Cévenols obtain for 266,000 an authorisation to operate a scheduled route, granted for 3 years and renewable twice, each renewal covering 3 years. The authority has always renewed these authorisations, at a low administrative cost, for operators complying with their specifications, which the entity does. However, it plans to abandon the route after 7 years, when a rail link opens. The authorisation is amortised on a straight-line basis, with no residual value. Determine the useful life and the annual amortisation charge.
- Cost of the authorisation
- 266,000
- Initial term of the authorisation
- 3
- Term of each renewal
- 3
- Intended period of operation
- 7