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Forums › Ask CIMA Tutor Forums › Ask CIMA F2 Tutor Forums › Intangible assets
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
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
Thank you very much Chris!