ACCA FR Chapter 6 Intangible assets (IAS 38) Questions
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Hi, Can someone please explain why in Q2 June and July were capitalised as the product was still in development? Shouldn’t they be expensed, the product was not ready for use?
in practice question 1 why should we consider Amortisation for 1 year
hiii
concerning question 3 can you explain how did we get the $25m and the amortisation of $1050000 please?
40m/10*3= 12m + 40/10*(9/12)= 3m (A+B) 12M +3M =15 being total amortization
40m-15= 25m.
cv=25, recoverable amount= higher of value in use and nrv= 21
current CV=25, IMPAIRMENT = 25-21=4
NB useful life of the asset was reviewed to 5yrs
21/5*(3/12)=1050000
new cv=21000000-1050000=19950000.
Amortisation should start when the production begins, so 800 (400*2) should only be capitalised. Why have they amortised it as per 30% if the production hasnt started yet Please help
WHERE DOES THI £8M COME FROM IN Q1 TO BE AMORTISED, SHOULD IT NOT BE £800,000*30%=£240,000?
Good Evening |Sir,
Please kindly explain the breakdown of the solution to this question 3.
I understand the 3 years and 10 months period but I don’t understand how the carrying value of $25,000,000 came about and
the amortisation of $21,000,000 with a 5 year life = $1,050,000.
Thanks.
Augusta.
Hello, Please I was hoping to understand why the development cost of $1,200,000 was expensed and not capitalised . Thank you
Hello sir,
I learnt from the video that we should capitalize development cost, so even though it’s a prototype we can capitalize as PPE, but it was expensed above sir In question One.
Please can you explain further.
We have several Criteria to capitalize Development Exp, one of the criteria is Commercial Viability, On Feb 1 the feasibility to generate revenue from the project was clear, till then directors were not sure whether it will generate the future economic benefits in terms of revenue or cost reduction.
whenever it is given that directors confirmed that project will benefit them, that is the time for capitalizing the development exp in SFP.
hello sir, why is $800,000 (Feb-Mar 2013) not amortized?
Because the product has not been launched and commercial production not started yet
Hi sir. For question 1, why only amortise 8 million balance brought forward, but doesn’t amortise the 800,000 capitalised development expenditure incurred between Feb to March? Thank you
Hello sir,
Please sir I also have the same issue with this question.
I will appreciate if you can explain further.
Thanks for your time.
Because the product has not been launched and commercial production not started yet, for $80M there was written that product launched and for the current development expenditure product will be going to launch next year.
Hello, I’ve a question regarding question 1 in this practice test (intangible assets ch.6). Why development expenditure of $400 per month incurred between 1.11 – 31.1 to build a prototype are being expensed instead of capitalised? Shouldn’t the design, construction and testing of prototypes and models be capitalised? Thank you.