The following information relates to Entrepreneurial Enterprises plc. (i) Purchased a brand in 1995 for 2 million. The directors believe the brand is now worth 7 million. (ii) Acquired a patent in January 2007, with ten years left to run, for 350,000. (iii) Bought a fishing quota to catch 1,000 tonnes of fish for 1,000 per tonne on 1 January 2012. The market value for the quota, for which there is an active market, was 1,400 per tonne on 31 December 2012.

(iv) Acquired a bus operating licence on 30 June 2012 to operate routes for the next eight years. The initial price paid was 480,000. A further 120,000 is payable on 1 January 2013. In addition, the company directors and senior management spent time (costed at 80,000) in developing the bid. (1) A major advertising campaign was carried out in the autumn of 2012. The directors believe the main benefits of this will arise in 2013. (vi) The accounting policy of the company in respect of intangible assets is as follows.

(a) Amortization:

(b) Valuation:

∎ Intangible assets for which there is an active market are revalued annually.

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Explain how each of the above items should be dealt with in the accounts of Entrepreneurial Enterprises plc for the year to 31 December 2012, and prepare the journal entries to show the adjustments for each of the items in preparing the accounts to 31 December 2012.

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On a straight-line basis over: Quota Brands Patents, licences, etc. 20 years 20 years remaining legal life when acquired