FIFA Footballs acquired a patent in 2018 at a cost of $450 million and amortizes the patent on a straight-line basis. During 2021 management decided that the benefits from the patent would be received over a total period of 8 years rather than the 20-year legal life being used to amortize the cost. FIFA's 2021 financial statements should include:. a. patent balance of 450 million
b. patent amortization expense of 45 million
c. patent amortization of 22.5 million
d. patent balance of 306 million

d. patent balance of 306 million

Explanation:

Calculation for what FIFA's 2021 financial statements should include

First step is to calculate Accumulated amortization at the end of 2021

Accumulated amortization at the end of 2021=($450 / 20 years*3years )+[$450-($450 / 20 years*3 years) / (8 – 3) years]

Accumulated amortization at the end of 2021=$67.5 million per year+[($450-$67.5)/5 years]

Accumulated amortization at the end of 2021=$67.5 million per year+$76.5million

Accumulated amortization at the end of 2021=$144 million

Now let calculate FIFA's 2021 financial statements

Patent= $450 million – $144 million

Patent = $306 million

Therefore FIFA's 2021 financial statements should include patent balance of 306 million