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Senario:
On 1 July 2021, Abacus Digital Ltd paid $1.2 million to acquire an interactive website named 'Swirlpool'. This website, which was established in 2006, contains a large number of discussion forums principally related to technology. Currently it has over 800,000 registered accounts although there are large numbers of unregistered guests that regularly use the site. The discussion forums enable users to leave comments and to discuss topics.
Abacus Digital intends to generate revenue by selling advertising space on the website. It is also considering obtaining sponsorship deals with selected technology companies.
Abacus Digital Ltd does not legally own the website. The internet domain name is registered and Abacus Digital Ltd pays a yearly registration fee to continue to use the domain name. In addition, it pays a monthly fee to a web hosting company to lease server space and bandwidth.
Problem 1: Is the useful life of the website assessed as finite or indefinite? why?
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