Todo Limited $("$Todo$")$ is a listed South African media broadcasting company which offers live TVbroadcasting and streaming services. Todo introduced the streaming services as a new service withinthe $2023$ financial year. Streaming services allow customers to watch television shows on demand. Dueto new entrants entering the market as well as current service providers like "Nedflax" the broadcastingindustry is highly competitive in South Africa. Todo has a $31$ March year end.You are a newly qualified accountant and have recently joined Todo. For the financial year ending$31$ March $2023$ the following matters came to your attention that need to be resolved before the financialstatements can be signed off.Patent $-$TV antenna amplifierTodo embarked on a research and development project during the $2022$ calendar year to develop a newTV antenna amplifier which will amplify the broadcasting signals to better the delivery of quality picturesto customers. At the completion of the research and development project, Todo registered a patent forthis developed TV antenna amplifier with the Companies and Intellectual Property Commission $($CIPC$)$of South Africa, for a period of $20$ years. The patent was ready for use as intended by management, aswell as brought into use on $1$ August $2022.$Below are details of the costs incurred in the in$-$house research and development project of the TVantenna amplifier:Phase $1$ costs $($Note $1)$ incurred $1$ March $2022$ to $31$ March $2022.$Phase $1$ costs $($Note $1)$ incurred $1$ April $2022$ to $30$ April $2022$Phase $2$ costs $($Note $2)$ incurred $1$ May $2022$ to $31$ July $2022.$Expected value of the $20-$year$-$old patent $($Note $3).$Note $1$: Costs incurred in investigating the prospect of developing the TV antenna amplifier. These costsinclude costs incurred when performing research$-$related tasks.Note $2$: Costs incurred in the application of the research findings to develop the TV antenna amplifier.These costs meet the requirements for recognition as per lAS$38,$ Intangible assets.Research cost $($P$/$IL$).$Note $3$: A broadcasting expert was contacted by Todo on $1$ August $2022,$ to estimate the value of theTV antenna amplifier patent and the end of the $20-$year patented term. There is currently no open marketfor this type of patent nor is there a buyer committed to purchasing the patent in $20$ years' time.Bank $($SFP$)$The previous accountant of Todo accounted for the cost incurred during the research and developmentproject of the TV antenna amplifier within the $2022$ financial year, as follows:Recognition of research costIntangible assets $-$Patent $($SFP$)$Bank $($SFP$).$Gain on capitalisation of previously expensed research cost $($P$/$L$)$Recognition of internally generated intangible assetDepreciation expense $($P$/$L$)$DrAccumulated amortisation $$ Patent $($SFP$)$Recognition of amortisation for the $2023$ financial year$($R$1720000-$ R$400000)/20$R$150000$R$150000170000$Subsequently within the $2023$ financial year, the previous accountant accounted for the costs incurredin relation to the entire research and development project of the TV antenna amplifier, as follows:Dr$1400000400000$R$172000066000$CrR$150000$CrR$157000015000066000$Page $3$ of $10$

Streaming services

The streaming services were first advertised by Todo in December of $2022$ whilst streaming services were launched nationally from $1$ February $2023.$ To obtain access to Todo's streaming services a customer signs a $12-$month contract, which meets the definition of identified contracts as per IFRS $15$: Revenue from contracts with customers. A customer is liable to pay a monthly streaming subscription fee of R$900,$ in advance on the first day of each month, to gain access to the streaming services of Todo for that particular month.

After signing the abovementioned contract, a customer should immediately purchase a decoder from Todo at a once$-$off fee of R$1400.$ This decoder is highly specialised and is the only device that can decrypt the video stream into watchable content for the customer. In addition, it is only capable of decrypting the video stream of Todo, and not of any competitors. The decoder becomes the property of the customer once installed. To install the decoder at the customers' premises, Todo puts its customers in touch with third party technicians who perform the installation for a once off fee of R$1000.$ The technicians are not part of Todo and accounts are settled directly with the technicians. The decoder has a negligible resale value for the customer. Todo manufactures these decoders at a cost of R$1200,$ each.

Herewith information pertaining to the number of new customer contracts signed by Todo applicable to the streaming services, during the $2023$ financial year:

January $2023.................................................................................................................200$

February $2023..................................................................................................................280$

March $2023.................................................................................$