During 2015, PJM Bhd incurred further development expenditure of RM3 million on the new process which meets the recognition criteria for capitalization of an intangible asset. Required (a) In the light of MFRS138 Intangible Asset, briefly explain how each of the above transaction should be accounted for in the financial statements of PJM Bhd for the year ended 31 December 2017.
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During 2015, PJM Bhd incurred further development expenditure of RM3 million on the new process which meets the recognition criteria for capitalization of an intangible asset.
Required (a) In the light of MFRS138 Intangible Asset, briefly explain how each of the above transaction should be accounted for in the financial statements of PJM Bhd for the year ended 31 December 2017.
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- In the light of MFRS138 Intangible Asset, briefly explain how each of the above transaction should be accounted for in the financial statements of PJM Bhd for the year ended 31 December 2017. Discuss the recognition criteria for intangible assets contained in MFRS138. (a) (b)Monroe Company is engaged in a number of research and development projects. Its accounting policy with regards to research and development is to capitalize expenditure as far as allowed by PAS 38 Intangible Assets. At June 30, 2024, the following balances existed in the company's accounting records: Project A : Development completed June 30, 2022. Total expenditure P200.000. Being amortized over five years on the straight-line basis in accordance with the company's standard policy. Balance at June 30, 2024: P120,000. Project B: A development project commenced July 1, 2019. Total expenditures in the years ended June 30, 2023 and June 30, 2024 totaled P175,000. During the year ended June 30, 2025, it became clear that a competitor had launched a superior product and the project was abandoned. Further development expenditure in the year ended June 30, 2025 amounted to P55,000. Project C: Development commenced October 1, 2020. Expenditures per year: Year ended June 30, 2025,…As at 31 December 2020, Aura Plc has a development asset on its Statementof Financial Position of £378,000 in respect of Project Alpha. Project Alphacommenced on 1 July 2020 and costs have been incurred evenly since thatdate. All costs have been capitalised since 1 July 2020.When reviewing the financial statements ahead of year end, it was discoveredthat this project was only determined to be commercially viable from 1 August2020.Which journal entry is required to correct the financial statements of Aura Plcfor the year ended 31 December 2020?a) DEBIT Research costs- Income statement £63,000CREDIT Intangible assets £63,000b) DEBIT Research costs- Income statement £31,500CREDIT Intangible assets £31,500c) DEBIT Intangible assets £63,000CREDIT Research costs- Income statement £63,000d) DEBIT Research costs- Income statement £315,000CREDIT Non-current assets £315,000
- d. Polycarp Ltd adopts revaluation model for subsequent measurement of its intangible assets in accordance with IAS 38: Intangible assets. The policy of Polycarp is to revalue its intangible asset at the end of each year. An intangible asset with an estimated useful life of 9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on 31 December 2018 and the revaluation surplus was correctly recognized on that date. As at 31 December 2019, the asset was revalued at GH¢32,000. Required: Discuss the accounting treatment required in 2018 and 2019 financial statements.Assume REH AG, a hypothetical company, incurs expenditures of €1,000 per monthduring the fiscal year ended 31 December 2009 to develop software for internal use.Under IFRS, the company must treat the expenditures as an expense until the softwaremeets the criteria for recognition as an intangible asset, after which time the expenditurescan be capitalized as an intangible asset.1. What is the accounting impact of the company being able to demonstrate that thesoftware met the criteria for recognition as an intangible asset on 1 February versus1 December?2. How would the treatment of expenditures diff er if the company reported under U.S.GAAP and it had established in 2008 that the project was likely to be completed?Francis-Toure (FT) Ltd adopts revaluation model for subsequent measurement of its intangible assets in accordance with IAS 38: Intangible assets. The policy of FT is to revalue its intangible asset at the end of each year. An intangible asset with an estimated useful life of 9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on 31 December 2018 and the revaluation surplus was correctly recognized on that date. As at 31 December 2019, the asset was revalued at GH¢32,000. Discuss the accounting treatment required in 2018 and 2019 financial statements.
- In each of the following scenarios (i) to (iv), advise on the appropriate accounting treatment for the intangible assets for year ended 31 March 2018. On 1 April 2017, HHH acquired, from a bankrupt competitor, a license to provide radio broadcast services to a region within Ireland. This license would have been originally issued by the government for a ten-year period at zero cost, but has a market value due to its exclusivity. The cost of the license to Handsetter was RM3.3 million, and the remaining useful economic life was 6 years. i. ii. On 1 April 2017, HHH commenced work on developing a new technology to enhance the quality of the radio broadcasts. It purchased a number of patents at a cost of RM2 million and spent a further RM6 million developing the technology, as well as RM2 million researching the international market for the technology in advance of its launch. The directors of HHH were confident throughout the development process that the technology had massive potential to…The original cost of the properties was P9,000,000 each when they were acquired on January 1, 2015. Both have an estimated useful life of 10 years The entity uses the fair value model to value all its investment properties. Required: Computed the followinga. Total amount recognized in the Dec. 31, 2017 statement of profit or loss b. Total amount recognized in the Dec. 31, 2017 Statement of financial position c. Provide adjusting enty on Dec. 31, 2017.MNO Ltd adopts fair value for subsequent measurement of its intangible assets. An intangible with an estimated useful life of 9 years was acquired on 1 January 2012 for GHC90,000. It was revalued to GHC108,800 on 31 December 2012 and the revaluation surplus was correctly recognized on that date. As at 31 December 2013, the asset was revalued at GHC64,000. Required: State the accounting treatment required in 2012 and 2013 financial statements
- Following is a list of items relating to the financial statements of YKN Bhd for the year ended 31December 2020• Amortisation of intangible assets of RM346,339• Corporate tax rate is at 24%.• Finance costs of RM831,138• Finance income of RM173,421• Gain due to exchange differences from translating functional currencies into presentationcurrency of RM120,000• Gain on disposals of major subsidiaries amounted to RM1,500• Gain on sales of manufacturing operating segment of RM100,000• Gains on re-measuring available-for-sale investment of RM80,000• Loss on litigation settlements of RM2,125,000• Loss amounted to RM450,000 due to disposal of its cotton mills, which constitute amajor line of business• Loss arising from translating the financial statements of a foreign operation of RM33,000• Loss from disposal of financial assets of RM50,000• Loss on disposals of items of property, plant and equipment of RM34,000• Loss on impairment of goodwill of RM110,000• Loss on re-measuring financial…Following is a list of items relating to the financial statements of YKN Bhd for the year ended 31December 2020• Amortisation of intangible assets of RM346,339• Corporate tax rate is at 24%.• Finance costs of RM831,138• Finance income of RM173,421• Gain due to exchange differences from translating functional currencies into presentationcurrency of RM120,000• Gain on disposals of major subsidiaries amounted to RM1,500• Gain on sales of manufacturing operating segment of RM100,000• Gains on re-measuring available-for-sale investment of RM80,000• Loss on litigation settlements of RM2,125,000• Loss amounted to RM450,000 due to disposal of its cotton mills, which constitute amajor line of business• Loss arising from translating the financial statements of a foreign operation of RM33,000• Loss from disposal of financial assets of RM50,000• Loss on disposals of items of property, plant and equipment of RM34,000• Loss on impairment of goodwill of RM110,000• Loss on re-measuring financial…Compute for the carrying value of intangible and other assets recognized in the balance sheet as of December 31, 2019. A) 2,622,250 B) 2,928,917 C) 3,122,000 D) 2,802,000