In need of help on this accounting problem some insight and help would be greatly appreciated...so here it is:?

[dallen47]

Isolution Company acquired patent rights on January 4, 2007, for $690,000. The patent has a useful life equal to its legal life of 15 years. On January 7, 2013, Isolution successfully defended the patent in a lawsuit at a cost of $62,100.

I have to determine to patent amortization expense for the current year ended December 31, 2013??

Thanks in advance

[therron57]

Here's one way to approach the problem.

Let's suppose the lawsuit never happened. Then the amortization cost would be 690,000/15 for every year of the 15 yr life of the patent. That's the base cost.

Now - lawsuit happens. How are we going to expense that? One way would be to expense it all in this year, so the total cost would be the Base Cost + $62,100,

Another way would be to amortize the lawsuit cost over the remaining useful life of the patent. (Remaining useful life is the key here). How many years have already passed in the patent's life? 2007 - 2012 = 5, so the remaining useful life is 10. and the total cost would be
Base Cost + 62100/10

You get to do the math