Vanity Ltd has two intangible assets as at 30 June 2020 and additional information of such...

  

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Vanity Ltd has two intangible assets as at 30 June 2020 and additional information of such intangible assets is as below. • Research and development asset: The research and development asset relates to a project concerned with a new form of facial serum, called Moist. During the research phase, an expenditure of $200,000 was incurred. The following expenditure was incurred in the development phase: $140,000 salaries of research staff, $75,000 general administrative staff salaries, and $60,000 depreciation on laboratory equipment. The development costs met the test for capitalisation as required in AASB 138. As at 30 June 2020, the estimated recoverable amount of this project is $600,000. Profitable sales are expected for a total of three years after commercial production is scheduled to commence in December 2020. • Masthead: within the last two years, Vanity Ltd has spent considerable time and resources totalling $475,000 establishing a very popular national magazine, called Beautilicious. Since this magazine is in great demand, its value is estimated to be $60o,000 based on current figures and its circulation. REQUIRED: Select the most appropriate accounting treatment and carrying amount for each intangible asset. Research costs: • Research costs should be initially recognised as an • Carrying amount of research costs at 30 June 2020: Development costs: • Development costs should be initially recognised as an : at a cost of • What is the appropriate measurement basis for subsequent measurement of development costs? • What is the amortisation expense relating to development costs for the year ended on 30 June 2020? Masthead: • Masthead should be initially recognised as because it was an • What is the appropriate measurement basis for subsequent measurement of masthead? • Carrying amount of masthead at 30 June 2020: asset expense acquired internally generated cost model revaluation model no subsequent measurement $0 $200,000 $215,000 $260,000 $275,000 $300,000 $475,000 $600,000 Vanity Ltd has two intangible assets as at 30 June 2020 and additional information of such intangible assets is as below. • Research and development asset: The research and development asset relates to a project concerned with a new form of facial serum, called Moist. During the research phase, an expenditure of $200,000 was incurred. The following expenditure was incurred in the development phase: $140,000 salaries of research staff, $75,000 general administrative staff salaries, and $60,000 depreciation on laboratory equipment. The development costs met the test for capitalisation as required in AASB 138. As at 30 June 2020, the estimated recoverable amount of this project is $600,000. Profitable sales are expected for a total of three years after commercial production is scheduled to commence in December 2020. • Masthead: within the last two years, Vanity Ltd has spent considerable time and resources totalling $475,000 establishing a very popular national magazine, called Beautilicious. Since this magazine is in great demand, its value is estimated to be $60o,000 based on current figures and its circulation. REQUIRED: Select the most appropriate accounting treatment and carrying amount for each intangible asset. Research costs: • Research costs should be initially recognised as an • Carrying amount of research costs at 30 June 2020: Development costs: • Development costs should be initially recognised as an : at a cost of • What is the appropriate measurement basis for subsequent measurement of development costs? • What is the amortisation expense relating to development costs for the year ended on 30 June 2020? Masthead: • Masthead should be initially recognised as because it was an • What is the appropriate measurement basis for subsequent measurement of masthead? • Carrying amount of masthead at 30 June 2020: asset expense acquired internally generated cost model revaluation model no subsequent measurement $0 $200,000 $215,000 $260,000 $275,000 $300,000 $475,000 $600,000

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