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AS 26
Accountancy
In this question balance 100lacs to be written off in next 3 years in the ratio of 1:1:1. How the amount to be amortized in years 4,5 and 6 of Rs.40 lacs, Rs. 40 lacs and Rs.20 lacs is calculated?
Answers (1)
An enterprise acquired patent right for Rs. 400 lakhs. The product life cycle has been estimated to be 5 years and the amortization was decided in the ratio of estimated future cash flows which are as under: Year 1 Rs. 200 lacs Year 2 Rs. 200 lacs Year 3 Rs. 200 lacs Year 4 Rs. 100 lacs Year 5 Rs. 100 lacs After 3rd year, it was ascertained that the patent would have an estimated balance future life of 3 years and the estimated cash flow after 5th year is expected to be Rs. 50 lakhs. Determine the amortization under Accounting Standard 26. This is the complete question.
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