January 20X8, for P500,000 while it has a legal life of 15 years, due to rapidly changing technology, management estimates a useful life of only 5 years. On January 1, 20X9, management is uncertain that the process can actually be made economically feasible, and decides to write down the patent to an estimated market
January 20X8, for P500,000 while it has a legal life of 15 years, due to rapidly changing technology, management estimates a useful life of only 5 years. On January 1, 20X9, management is uncertain that the process can actually be made economically feasible, and decides to write down the patent to an estimated market
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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7. A patent right is acquired on January 20X8, for P500,000 while it has a legal life of 15 years, due to rapidly changing technology, management estimates a useful life of only 5 years. On January 1, 20X9, management is uncertain that the process can actually be made economically feasible, and decides to write down the patent to an estimated market value of P150,000 with no change in its remaining useful life. On January 1, 20Y0, having perfected the related production process, the asset is now appraised at a sound value of P600,000. Determine the gain on impairment recovery on 20Y0.
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