Document ID: chunk:federal_register_of_legislation:F2023C00425:body:0:p33
Version: federal_register_of_legislation:F2023C00425
Segment Type: other
Provision Reference: 
Character Range: 83139–85787

more than three years.
The customer list would be amortised over management's best estimate of its useful life, say 18 months. Although the direct-mail marketing company may intend to add customer names and other information to the list in the future, the expected benefits of the acquired customer list relate only to the customers on that list at the date it was acquired. The customer list also would be reviewed for impairment in accordance with AASB 136 Impairment of Assets by assessing at the end of each reporting period whether there is any indication that the customer list may be impaired.

Example 2 An acquired patent that expires in 15 years
The product protected by the patented technology is expected to be a source of net cash inflows for at least 15 years. The entity has a commitment from a third party to purchase that patent in five years for 60 per cent of the fair value of the patent at the date it was acquired, and the entity intends to sell the patent in five years.
The patent would be amortised over its five-year useful life to the entity, with a residual value equal to the present value of 60 per cent of the patent's fair value at the date it was acquired. The patent would also be reviewed for impairment in accordance with AASB 136 by assessing at the end of each reporting period whether there is any indication that it may be impaired.

Example 3 An acquired copyright that has a remaining legal life of 50 years
An analysis of consumer habits and market trends provides evidence that the copyrighted material will generate net cash inflows for only 30 more years.
The copyright would be amortised over its 30-year estimated useful life. The copyright also would be reviewed for impairment in accordance with AASB 136 by assessing at the end of each reporting period whether there is any indication that it may be impaired.

Example 4 An acquired broadcasting licence that expires in five years
The broadcasting licence is renewable every 10 years if the entity provides at least an average level of service to its customers and complies with the relevant legislative requirements. The licence may be renewed indefinitely at little cost and has been renewed twice before the most recent acquisition. The acquiring entity intends to renew the licence indefinitely and evidence supports its ability to do so. Historically, there has been no compelling challenge to the licence renewal. The technology used in broadcasting is not expected to be replaced by another technology at any time in the foreseeable future. Therefore, the licence is expected to contribute to the entity's net cash inflows indefinitely.
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