Corbanne acquired for 500,000 an operating right amortised on a straight-line basis over 10 years. As a third party has committed to buy back the right at the end of that period, Corbanne used a residual value of 100,000. After 4 years of amortisation, the buy-back commitment is renegotiated and the residual value is reduced to 52,000; the total useful life and the amortisation method are unchanged. Calculate the carrying amount of the right at the date of the revision and the new annual amortisation charge.
- Acquisition cost of the right
- 500,000
- Total useful life (years)
- 10
- Initial residual value
- 100,000
- Years of amortisation elapsed
- 4
- Revised residual value
- 52,000