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
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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
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- 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.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.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?
- 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.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)QUESTION 1 Polycarp Ltd adopts revaluation model for subsequent measurement of its intangible assetsin accordance with IAS 38: Intangible assets. The policy of Polycarp is to revalue itsintangible asset at the end of each year. An intangible asset with an estimated useful life of9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on31 December 2018 and the revaluation surplus was correctly recognized on that date. Asat 31 December 2019, the asset was revalued at GH¢32,000. Required: Discuss the accounting treatment required in 2018 and 2019 financial statements. QUESTION 2 E. Adentwi Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It depreciates the machine on cost over four years assuming a nil residual value. The company received a grant of GH₵30,000 from the municipal assembly to support the acquisition of the machines. Required: Account for this grant under the netting off method.
- PAS 16 requires that revaluation surplus resulting from initial revaluation property, plant and equipment should be treated in one of the following ways. Which of the four options mirrors the requirements of PAS 16? a. Released to the income statement an amount equal to the difference between the depreciation calculated on historical cost vis-à-vis revalued amount. b. Debited to the class of property, plant and equipment that is being revalued and credited to a reserve captioned “revaluation surplus” which is presented under “equity”. c. Deducted from current assets and added to the property, plant, and equipment. d. Credited to retained earnings as this is an unrealized gain.A fixed asset with a cost of $21,296 and accumulated depreciation of $19,166 is traded for a similar asset priced at $68,841 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,779, at what cost will the new equipment be recorded in the books? a.$68,841 b.$64,062 c.$66,192 d.$70,971A fixed asset with a cost of $21,296 and accumulated depreciation of $19,166 is traded for a similar asset priced at $68,841 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,779, at what cost will the new equipment be recorded in the books? a.$68,841 b.$64,062 c.$66,192 d.$70,971A fixed asset with a cost of $21,296 and accumulated depreciation of $19,166 is traded for a similar asset priced at $68,841 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,779, at what cost will the new equipment be recorded in the books? a.$68,841 b.$64,062 c.$66,192 d.$70,971A…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…
- A fixed asset with a cost of $36,671 and accumulated depreciation of $33,004 is traded for a similar asset priced at $53,888 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,581, at what cost will the new equipment be recorded in the books? a.$914 b.$4,581 c.$32,090 d.$53,888A fixed asset with a cost of $25,974 and accumulated depreciation of $23,377 is traded for a similar asset priced at $40,828 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,683, the cost basis of the new asset is Select the correct answer. $43,425 $38,742 $40,828 $36,1451. E. Adentwi Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It depreciates the machine on cost over four years assuming a nil residual value.The company received a grant of GH₵30,000 from the municipal assembly to support the acquisition of the machines. required :Account for this grant under the netting off method. 2. 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.