Takeout Limited is a diversified company involved in a wide range of activities in the food take aways. Take out following activities during the year. The company purchased a brand on 1 January 2020 for R3 000 000. At acquisition, the estimated useful life of the brand was 15 years. At acquisition it was determined that that there is no active market for the brand. At 31 December 2020, the directors of Takeout believed that the brand is now worth R4 000 000. Required Explain, giving reasons, how each of the above transaction should be dealt with in the financial statements of Eat Limited for the year ended 31 December 2022, in accordance with IAS 38 Intangible assets. Your answer should focus on recognition and measurement an include calculations where relevant. Round of to the nearest Rand.
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Takeout Limited is a diversified company involved in a wide range of activities in the food take aways. Take out following activities during the year. The company purchased a brand on 1 January 2020 for R3 000 000. At acquisition, the estimated useful life of the brand was 15 years. At acquisition it was determined that that there is no active market for the brand. At 31 December 2020, the directors of Takeout believed that the brand is now worth R4 000 000. |
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Required
Explain, giving reasons, how each of the above transaction should be dealt with in the financial statements of Eat Limited for the year ended 31 December 2022, in accordance with IAS 38 Intangible assets.
Your answer should focus on recognition and measurement an include calculations where relevant.
Round of to the nearest Rand.
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