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Intangible assets

Forums › Ask CIMA Tutor Forums › Ask CIMA F2 Tutor Forums › Intangible assets

  • This topic has 2 replies, 2 voices, and was last updated 3 years ago by acaqub.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • July 22, 2021 at 1:52 pm #629117
    acaqub
    Participant
    • Topics: 32
    • Replies: 88
    • ☆☆

    Dear Tutor,

    I got a question to ask relating the recognition and subsequent measurement of the intangible assets.

    In a question, I have been asked to discuss the accounting treatment of 3 options (for initial and subsequent measurements)

    Option 1: Purchase the learning material and the copyright will have a useful life of 10 years.
    My treatment: It’s a direct purchase. Recognition of the material and copyright both at cost + direct costs and the amortisation will be in 10 years (straight-line method)

    Option 2: Purchase a smaller publisher with writers and copyrights valued at XX.
    My treatment: It’s a purchase as part of business combination. On this occasion, the cost will be original cost of the material + directly attributable costs but this asset should be presented apart from goodwill and the it will be amortised on a straight-line basis.

    Option 3: To subscribe to publishers for learning material and the price will vary depending on the content and publisher. The cost will be the point of purchase cost of the material + directly attributable costs and the it will be amortised on a straight-line basis.

    Am I getting all things right?

    Thanks and regards

    Jasper

    July 24, 2021 at 12:55 pm #629318
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7156
    • ☆☆☆☆☆

    Hi,

    Where has the question come from?

    Option 1 – all looks correct

    Option 2 – assuming we have control then IFRS 3 would come into play and the intangibles recognised at FV of X within the group accounts

    Option 3 – is a monthly subscription to a service and we’d just accrue for the variably monthly cost at the end of the month.

    Hope that helps clear it up a bit.

    Thanks

    Chris

    July 24, 2021 at 12:58 pm #629319
    acaqub
    Participant
    • Topics: 32
    • Replies: 88
    • ☆☆

    Thank you very much Chris!

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