Planet Lestari Sdn . Bhd . is a manufacturer of a plastic bottle recyclable. The accounting period
Fantastic news! We've Found the answer you've been seeking!
Question:
Planet Lestari Sdn Bhd is a manufacturer of a plastic bottle recyclable. The accounting period
ends on every December Information on intangible assets are as follows:
Beginning balance of intangible assets
The balance of intangible assets on January are as follows:
Computer software Patent
RM RM
Cost
Accumulated amortization
Carrying amount
New production technology
Planet Lestari was developing a new production technology that started in May The
technology is expected to be patented when it is completed and can be commercialized. An
estimated cost for this project was RM The total of RM incurred in the
current year was in the research phase.
Patent
The patent was acquired from Jitu Tech Sdn Bhd On December at RM The
technology from this patent can only be used in the production process starting in The
patent has an exclusive right to be used in the production for another eight years. However,
Planet Lestari expects to change to a newly developed technology in another six years.
Accounting policies for intangible assets
a The amortization method for intangible assets is a straightline method. A fullyear
amortization is charged in the year the asset is acquired and no amortization in the
year the asset is disposed.
b The computer software is amortized for four years. The amortization expense of
computer software for amounted to RM
c Amortization of a patent is based on the expected legal life or economically useful
life.
d Planet Lestari chose to adopt MFRS in preparing its financial statements.
EPPA
Required:
a Explain, in reference to MFRS Intangible Assets:
i the difference between accounting treatment for intangible assets with definite
and indefinite useful life.
ii whether the expenses incurred in developing a new technology during the current
year should be capitalized.
iii how the acquisition of a patent should be accounted for.
b Show the presentation of the intangible assets in the Statement of Financial Position
on December Presentation in the body of the statement and the notes to the
account
Related Book For
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
Posted Date: