USA Capitalized costs

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Jan 9, 2021
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Hi everyone,

Can you help me with the following exercise?

Capitalized amount is $ 10.000.000
Contract start date is 01/04/2018
End date is 31/03/2023
The FY is 01/05/2018 until 30/04/2019

The amount was capitalized at the start date. From that date, the firm starts amortizing the capitalized costs. These should be amortized over the duration of the contract.

What is the amount to be amortized in the income statement during the FY19?
What is the NBV of the capitalized costs?

Can you lead me through your thought process?
Thanks!
 

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