Financial Reporting (FR) Mar / June 2021 Examiner’s report
Where did candidates go wrong?
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- Điều hướng trang này:
- Which TWO of the following statements are true in relation to IAS 38 Intangible Assets Options
| Where did candidates go wrong?
Selecting option A was a common mistake. Candidates should take care to realise that tangible non-current assets and intangible assets are entirely different. Different IFRS Standards apply to each and revaluing intangible assets is actually quite Which TWO of the following statements are true in relation to IAS 38 Intangible Assets? Options: A. IAS 38 requires the revaluation of intangible assets where a company has chosen to revalue its tangible non-current assets B. IAS 38 does not permit the revaluation of any intangible assets in any circumstances C. IAS 38 permits the revaluation of intangible assets only if there is an active market for such assets D. IAS 38 requires that the initial recognition of intangibles must be at cost Examiner’s report – FR March/June 2021 12 uncommon. There is certainly no requirement to revalue intangible assets simply because tangible non-current assets are revalued. Question 3 What is the correct answer? The correct answer is A – $5.5m. The $15m of project costs incurred between 1 April 20X6 and 31 December 20X6 cover a nine-month period. As the project did not meet the capitalisation criteria of IAS 38 until 30 June 20X6, this means that any costs related to the first three months of the year (1 April 20X6 – 30 June 20X6) were research expenditure which should be charged to the statement of profit or loss: $15m x 3/9 months = $5m Therefore, the remaining $10m ($15m x 6/9 months) would be capitalised as development expenditure. As the project was completed and began to generate revenue from 1 January 20X7, the capitalised development expenditure should then be amortised from that date over its useful life of five years. This requires an amortisation expense for three months (1 January 20X7 – 31 March 20X7) which should be charged to the statement of profit or loss: $10m / 5 years x 3/12 months = $0.5m Therefore, the total charge to the statement of profit or loss in respect of project 324 for the year ended 31 March 20X7 consists of: Research expense $5m Amortisation expense $0.5m Total charge to statement of profit or loss tải về 0.8 Mb. Chia sẻ với bạn bè của bạn:
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