Brenval pays a commission of 12,000 to a business introducer to obtain an IT hosting contract with a term of 3 years. Brenval has specifically identified an anticipated renewal with a term of 1 year, for which no commission will be due. The service is provided evenly over time; Brenval therefore uses straight-line amortisation. Calculate the annual amortisation charge of the asset recognised from the costs of obtaining the contract.
- Commission paid to obtain the contract
- 12,000
- Term of the initial contract
- 3
- Term of the anticipated renewal
- 1