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IT IS HIGHVELDT i wanted to watch ur video for perception it but i was not able to be successful to watch it.sth went wrong it does not open
Hi Mr Mike, I have a question.
Note(iv)- Samson’s development project was completed on 30 September 20X4 at a cost of $50 million. $10 million of this had been amortised by 31 March 20X5. Development costs capitalised by Samson at the date of acquisition were $18 million.
Highveldt’s directors are of the opinion that Samson’s development costs do not meet the criteria in IAS 38 ‘Intangible Assets’ for recognition as an asset.-it says does not meet the criterion of intangible asset but capitalised.Confusing ver confusing
Why we take into consideration capitalised amount of (18) at date acquisition as negative amount simultaneously at date of reporting (40) (50-10)
Because we’re trying to find the fair value of assets acquired as at date of acquisition and one of those assets, according to Samson’s records, is the capitalised development expenditure that, on reflection, should not be included as an asset
And that’s why we deduct it from the calculation of:
“Fair value of S net assets at date of acquisition”
At reporting date, that development expenditure capitalised amount stands at $40 million ($50 million cost less $10 million amortised)
But it shouldn’t be there as an asset so we need to eliminate that amount from retained earnings
OK?
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