ACCY200 Financial Accounting Question-
A small privately owned Australian company 'Shoes n Socks' designs and sells original one off shoes and socks. The company has slowly built up brand recognition throughout Australia and five other countries. It has developed other brands such as 'Rusty Hats' and 'Twinkle Accessories' which it has recorded in its balance sheet.
The company has grown and is now a large private company and will have to prepare financial statements for the first time in accordance with the AASB accounting standards. They are also about to acquire a small Sydney based business so that they can own the brand 'Blue Jeans'.
Required:
Discuss how 'Shoes n Socks' will have to account for its internally generated brands and the brand being acquired in a business combination under AASB138 Intangible Assets. Your discussion should include both initial measurement and subsequent measurement issues.