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A company acquired new software for a robot that would revolutionise its manufacturing process. The costs were: Original cost of the software X1 Discount provided

A company acquired new software for a robot that would revolutionise its manufacturing process.

The costs were:

Original cost of the software X1

Discount provided 5%

Staff training incurred in operating the robot 400

Testing of the software 100

Allocated administrative expenses 50

1. Provide relevant X1 and calculate the cost of this intangible asset?

2. The software was amortised at the rate of 20% using reducing balance method. After three years, its fair value was X2 and estimated cost to sell was X3. The value in use of the software at that time was X4. In the year,there was an economic crisis and the company wished to make an impairment review for its assets.

Required:

Provide relevant information with X2, X3, X4 so that there is an impairment loss of the software.

Calculate and explain your work.

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