A testing laboratory acquires a licence to use a screening method for 840,000 and will operate it for 6 years. A peer laboratory has contractually committed to buy the licence back for 120,000 at the end of that period. The straight-line method is used. Calculate the depreciable amount and the annual charge.
- Cost of the licence
- 840,000
- Agreed buy-back price
- 120,000
- Useful life
- 6