A question about patent amortization expense

[zxfmontreal]

Hey I encountered a question saying a company acquired a patent on June 30, year 1 for $60,000. The patent has a remaining legal life of 15 years but is expected to have a useful life of only 10 years without any residual value. What would be the amortization expense on the patent for year 1 using the straight line method?

There are choices of 2000, 3000 and 6000.

I got 6000 from (60000-0)/10.

But the correct answer is (60000/10)*0.5=3,000.

Anyone knows why times one half?

Thx in advance!

[S2000magician]

Presumably their fiscal year is a calendar year: there are only 6 months left in this fiscal year (after Jun 30), so they only get 6/12= 0.5 of a full year’s amortization.

[zxfmontreal]

@S2000magician

Presumably their fiscal year is a calendar year: there are only 6 months left in this fiscal year (after Jun 30), so they only get 6/12= 0.5 of a full year’s amortization.

Amazing to see how simple the logic is…

Merci!

[S2000magician]

@zxfmontreal

@S2000magician

Presumably their fiscal year is a calendar year: there are only 6 months left in this fiscal year (after Jun 30), so they only get 6/12= 0.5 of a full year’s amortization.

Amazing to see how simple the logic is…

Merci!

D’accord!