Patents were acquired at cost of 80 million and were revalued soon afterwards. They have an estimated life of 16 years, of which 12 years remain.
The trademark can be renewed indefinately, subject to continued use. The cost represents registration fees, which were initially expensed but recognised five years later after the trademark had started to become recognised by consumers.
IP ltd reports the following intangible assets:
Patents at directors valuation .........160 million less
accumulated amortization .........(40 million)120 million
Trademarks at cost ............15 million Goodwill at cost .............
50Million less accumulated amortization ......... (10 million)40 million
Brand name ................100 million Licence at cost ..............10 million less accumulated amortization ....... (1 million)9 million
Goodwill has been purchased and a mortised on the straight line basis.
The brand name is stated at fair value and is internally generated the licence has a 10 year life of which nine years remain. The licence can be traded in an active market and has a fair value of 17 million.
QUESTION A) State how each asset or class of assets should be reported in accordance with AASB 138B) State the carrying value and whether each asset/ asset class should be a mortised. Specify any choice of method permitted for IP Ltd.