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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Intangible asset capitalisation
Q1. X has a three-year agreement with a tennis player who is currently ranked in the world’s top ten players. The agreement is that the player receives a signing bonus of $20,000 and earns an annual amount of $50,000 paid at the end of the year for three years, provided that the player has competed in all the specified tournaments for each year.
How to account for $20000 and $50000?
Q2.If the player wins a major tournament, she receives a bonus of 20% of the prize money won at the tournament. In return, the player is required to wear advertising logos on tennis apparel, the different payments are not interrelated
HOW to account for 20% bonus?
You need to define intangible, state recognition rules, define employee benefit or provision, then apply to the scenario. Your exam kit will show tutors’ suggested answer.
As always, it’s the basic knowledge that gets you through.
In future please express questions in your own words and it’s one question per thread please.