CERTYNEX IFRS ACADEMY

A management controller asks why amortisation of a finite-life licence, amortised on a straight-line basis, continues although it remained unused for the whole year. Which answer is consistent with IAS 38?

The depreciable amount is allocated systematically over the useful life, and idleness is not one of the cases in which amortisation stops.

Amortisation measures the loss in market value of the licence during the year.

Amortisation is a tax charge that must be recognised every year, whatever the use.

Amortisation continues only out of prudence, and the entity may choose to suspend it.