Elizabeth Sound Ltd is an established and wellknown record company with a Dec 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 Mashup Indian Idol The final record deal was signed on Aug and stipulated, inter alia, the following:

Elizabeth Sound Ltd will pay Mashup an amount of $ million to record one album consisting of ten tracks, with the company.

Elizabeth Sound Ltd will bear all costs necessary to create, produce, promote, reproduce and distribute the album.

The master recording will remain the property of Elizabeth Sound Ltd 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 Ltd during this three year period and Mashup will receive royalties in respect of these sales as stipulated in a separate royalty agreement.

After the three year period, Mashup will buy the master recording back from Elizabeth Sound Ltd for an amount of $ million, after which Elizabeth Sound Ltd will have no rights whatsoever in respect of this album. The $ million was paid to Mashup on Sep Recording of the album commenced on Oct and was completed by June The album was available for release and distribution by Aug

Required:

Discuss, with reasons, whether or not the master recording made by Elizabeth Sound Ltd meets the definition of an intangible asset in terms of IAS Intangible Assets. You should analyse your answer under the following heading:

Definition of Intangible Assets, Identifiability, Monetary or nonmonetary, Definition of assets, Control of assets, Past events, Future economic benefit, Physical substance and Conclusion.