Company 1 has provided items to company 2 to be used in their next football match. Company 1 has previously done this due to the advertising footfall the football match provides which is hosted by company 2. The items are provided free of charge but are valued at £55,000. Company 1 retains legal ownership of these items but does not require/expect them to be returned as they understand the items will be damaged and not fit for repair after the football match.

Under IAS 38 can the cost of advertisement of £55,000 be capitalised as an intangible asset and why ? 

Answer rating: 100% (QA)

IAS 38 states that an intangible asset should be recognized if and only if it is probable t... View the full answer