Information for Canberra Corporation s intangible assets follows 1 On January 1
Information for Canberra Corporation's intangible assets follows:
1. On January 1, 2014, Canberra signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $75,000. Of this amount, $35,000 was paid when the agreement was signed and the balance is payable in four annual payments of $10,000 each, beginning January 1, 2015. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2014, of the four annual payments discounted at 8% (the implicit rate for a loan of this type) is $33,121. The agreement also provides that 5% of the franchisees revenue must be paid to the franchisor each year. Canberra's revenue from the franchise for 2014 was $800,000. Canberra estimates that the franchise's useful life will be 10 years.
2. Canberra incurred $45,000 of experimental costs in its laboratory to develop a patent, and the patent was granted on January 2, 2014. Legal fees and other costs of patent registration totalled $13,600. Canberra estimates that the useful life of the patent will be six years.
3. A trademark was purchased from Shanghai Company for $28,600 on July 1, 2011. The legal costs to successfully defend the trademark totalled $8,160 and were paid on July 1, 2014. Canberra estimates that the trademark's useful life will be 15 years from the acquisition date.
Assume that Canberra reports using ASPE.
(a) Prepare a schedule showing the intangible assets section of Canberra’s statement of financial position at December 31, 2014. Show supporting calculations in good form.
(b) Prepare a schedule showing all expenses resulting from the transactions that would appear on Canberra’s income statement for the year ended December 31, 2014. Show supporting calculations in good form.
(c) How would your response change under IFRS?
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