2. The draft financial statements of Dexter Ltd. are being prepared by your trainee accountant, Deedee. A number of outstanding issues are set out below which require your attention as the financial controller, as Deedee was unsure of the correct accounting treatment. The draft financial statements are for the year ended 30 September 2019.

(a) On 1 April 2019 Dexter Ltd paid 72,000 for a licence for the production of a state-of-the-art microchip. At the end of six years it is thought that the licence will be worthless due to advances in technology. Deedee has recognised the licence in the draft financial statements as an intangible non-current asset of 90,000 as this is the amount that a competitor offered to Dexter Ltd for the licence on 30 June 2019 due to its unique nature. Deedee showed the increase in value as a revaluation surplus in capital and reserves.

(b) A piece of equipment was classified as Held for Sale on 30 March 2019. The equipment had originally cost 112,500 three years earlier and had a useful life of five years with no residual value. Dexters policy is to charge a full years depreciation in the year of acquisition and none in the year of disposal. On classification as Held for Sale the fair value of the plant and equipment was estimated as 63,000 with costs to sell estimated as 2,500.

As the asset had not been sold at the end of the year, Deedee charged an annual depreciation to the asset. As at the end of the financial year the fair value of the equipment had fallen to 59,000 with costs to sell rising to 3,500.

d) Deedee received the following information in relation to work-in- progress (WIP) inventory from the production facility.

Material costs= 50,250 (1) Conversion costs=42,000 (2)

Costs incurred to date (1+ 2)= 92,250

The production manager indicated that the WIP still needs some more work before it is ready to be sold to customers. He estimated that it would cost an additional 10,750 to complete the processing of the WIP. Once completed, the finished goods can sell for 105,000, although a cost of 2,500 will be incurred to sell the inventory.

Explain how issues above need to be treated in Dexter Ltd.s financial statements for the year ended 30 September 2019, in accordance with the relevant IFRS requirements.