Question
Activity 2: Initial measurement of a separately acquired intangible asset Apricot Co purchases an operating license from an overseas supplier for $180,000 plus nonrefundable purchase
Activity 2: Initial measurement of a separately acquired intangible asset
Apricot Co purchases an operating license from an overseas supplier for $180,000 plus nonrefundable purchase taxes of $18,000. The supplier's normal list price is $200,000 but it has awarded Apricot Co a 10% trade discount. Apricot Co must pay import duties on the purchase of this license of $20,000.
As part of the purchase process, Apricot Co seeks advice from a lawyer and incurs legal fees of $15,000.
Required
Calculate the initial cost of the intangible asset that Apricot Co should recognize in relation to this license.
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