Advise DipGirl Pty Ltd as to the deductibility of both the $50,000 and $3,200 amounts

DipGirl Pty Ltd (DGPL) is a surfwear brand which manufactures clothing and surfboards for retail sale. This year, to engage more surfers with their brand, DGPL pays the local council for exclusive rights to run an annual surfing competition at Shells Beach. This is the first time DGPL have entered into such an arrangement and it cost them $50,000. The arrangement will give them exclusive use of the beach for their annual surf event (as part of the contract no other major surf events are able to be held at Shells Beach for the next 3 years). They are not sure if they will enter into another contract at the end of the 3 years.

DGPL have hired some extra staff to help prepare for their surf event. They anticipate that next year (2021) these staff will have accrued annual/recreational leave of $3,200 in total. They put the $3,200 into a savings account hoping to take a deduction for the amount this year.