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Elizabeth Sound Limited is an established and well-known record company with a 31 December reporting date. The companys main business is to sign recording deals

Elizabeth Sound Limited is an established and well-known record company with a 31 December reporting date. The companys main business is to sign recording deals with popular music artists and then earn income from subsequent record sales. After lengthy and complicated negotiations, the company finally managed to sign a recording deal with one of the latest pop sensations in India, namely Mash-up Indian Idol. The final record deal was signed on 31 August 2021 and stipulated, inter alia, the following: Elizabeth Sound Limited will pay Mash-up an amount of $ 5 million to record one album consisting of ten tracks, with the company. Elizabeth Sound Limited will bear all costs necessary to create, produce, promote, reproduce and distribute the album. The master recording will remain the property of Elizabeth Sound Limited for a period of three years after the initial release of the album. All proceeds in respect of the album sales will accrue to Elizabeth Sound Limited during this three year period and Mash-up will receive royalties in respect of these sales as stipulated in a separate royalty agreement. After the three year period, Mash-up will buy the master recording back from Elizabeth Sound Limited for an amount of $1 million, after which Elizabeth Sound Limited will have no rights whatsoever in respect of this album. The $ 5 million was paid to Mash-up on 15 September 2021. Recording of the album commenced on 1 October 2021 and was completed by 30 June 2022. The album was available for release and distribution by 31 August 2022. Required: Discuss, with reasons, whether or not the master recording made by Elizabeth Sound Limited meets the definition of an intangible asset in terms of IAS 38, Intangible Assets. You should analyse your answer under the following heading: Definition of Intangible Assets, Identifiability, Monetary or non-monetary, Definition of assets, Control of assets, Past events, Future economic benefit, Physical substance and Conclusion

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