Question $3$a On $31$ December $2023,$ Charlie Ltd $($Charlie$)$ acquired Delta Ltd $($Delta$).$ Among the assets acquired by Charlie was a patented technology $$ValueTech$$ utilising advanced tools to conduct automated valuation. The Chief Technology Officer of Charlie has noted the speed of innovation in the technology space and expects significant progress in this area utilising $$Generative Artificial Intelligence$$ in time to come. On this basis, it is expected that new technology will be available at the beginning of $2027,$ which will replace $$ValueTech$.$ As part of this transaction, Charlie will need to conduct a valuation of $$ValueTech$$ as of acquisition date. The relief from royalty method is deemed appropriate for the valuation. $$ValueTech$$ is expected to continue to generate cash flows for the next three years before the new technology comes into existence. $$ The following is a summary of the assumptions relevant for the valuation: $$ Year$-$end discounting convention will be used for discounting of cash flows. $$ The discount rate of $15\%$ is to be adopted. $$ Tax rate is at $20\%.$ Royalty rate is at $10\%$ of the revenue generated. $$ Projected revenue from using $$ValueTech$$ for the respective years, are as follows: $-2024$: $$15$ million $-2025$: $$12$ million $-2026$: $$5$ million $$ In the jurisdiction where the acquisition took place, the technology cost is allowed for tax deduction based on a statutory $5-$year tax life. $$ Calculate the fair value of the patent $$ValueTech$$ as of $31$ December $2023.(20$ marks$)$ Question $3$b For each of the following, examine whether it meets the identifiability criteria for recognition as an $$identifiable intangible asset$$ that can be recorded as acquired in a business combination. $($A$)$ Technology that are not patented. $($B$)$ Strong and favourable employee relations. $($C$)$ List of customers. $($D$)$ Skilled management team. $($E$)$ Favourable lease agreement. $(10$ marks$)$