Please solve

kapil Ltd. is in process of setting up a drug manufacturing business For this purpose KapilLtd. as part of its business expansion strategy acquired on 1st April, 20118, 58% shares of Akash Ltd., a company that manufactures pharmacy products. The purpose consideration for the same was by way of a share exchange valued at Rs.238 crores. The fair value of Akash Ltd.'s assets and liabilities were Rs.88 crores and Rs.50 crores respectively, but the same does not include the following :

(i) A parent owned by Akash Ltd. for an established successful new drug that has a remaining life of 6 years. A consultant has estimated the value of this patent to bee Rs.8 crores. However, the outcome of clinical trials for the same are awaited. If the trails are successful, the value of the drug would fetch the estimated Rs.12 crores.

(ii) Akash Ltd. has developed and patented another new drug which has been approved for clinical use. The cost of developing the drug was Rs.13 crores. Based on early assessment of its sales success, a reputed values has estimated is market value at Rs.19 crores. However, there is no active market for the patent.

(iii) Akash Ltd.'s manufacturing facilities have received a favourable inspection by a government department. As a result of this, the company has been granted an exclusive five-year license on 1st April, 2018 to manufacture and distribute a new vaccine. Although the license has no direct cost to the Company, its directors believe that obtaining the license is a valuable asset which assures guaranteed sales and the cost to acquire the license is estimated at Rs.7 crores for remaining period of life. It is expected to generate at least equivalent revenue.

Suggest the accounting treatment of the above transactions with reasoning under applicable Ind AS in e books of MNC Ltd.

Questuion 4

One of the Juniorsengineers at malaysia has been working on a process tomanufacturing efficiency and, consequently, reduce manufacturing costs. This is a major project and has the full support of XYZs board of directors. The senior engineer believes that the cost reductions will exceed the project costs within twenty four months of their implementation. Regulatory testing and health and safety approval was obtained on 1 June 20X5. This removed uncertainties concerning the project, which was finally completed on 20 April 20X6. Costs of Rs.18,00,000, incurred during the year till 31st March 20X6, have

been recognized as an intangible asset. An offer of Rs.7,80,000 for the new developed technology has been received by potential buyer but it has been rejected by XYZ. Utkarsh believes that the project will be a major success and has the potential to save the company Rs.12,00,000 in perpetuity. Director of research at XYZ, Neha, who is a qualified electronic engineer, is seriously concerned about the long term prospects of the new process and she is of the opinion that competitors would have developed new technology at some time which would require to replace the new process within four years. She estimates that the present value of future cost savings will be Rs.9,60,000 over this period. After that, she thinks that there is no certainty about its future. What would be the appropriate accounting treatment of aforesaid issue?