Giant Ltd owns 60% of the equity share capital of Tiny Ltd. The draft comprehensive Income statements for the two companies for the year ended 31 December 2020 are:

Further information: Tiny sold goods to Giant during the year for 120,000 at a 25% profit mark-up on cost. At 31st December 2020, Giant still had 60,000 of these goods in inventories. Tiny approved and paid dividends of 50,000 during the year to 31 December 2020. Giant paid 440,000 for its share in Tiny. At the date of acquisition, a share in Tiny was estimated to have a market value of 1.75 , and the equity section of Tiny was as follows: 000 Share Capital 1 400 Retained earnings 240 640

It is the Giant Groups policy to value Non-Controlling Interests at fair value (full goodwill method). At 1 January 2020 there had been no impairments to the goodwill recognised on the acquisition of Tiny. However, in the year to 31 December 2020, goodwill was determined to have undergone a 10% impairment. There are no other group companies.

a) Calculate the value of goodwill showing on the Giant Group Statement of Financial Position as at 31 December 2020. b) Prepare the consolidated comprehensive income statement for the Giant Group for the year to 31st December 2020 under IFRS.

c)Giant Ltd have recently invested a significant amount of money on a number ofintangible assets as follows: i.A patent purchased from their competitor Mezzo Ltd to allow production of anestablished product the Piccolo Press; ii.The Piccolo Press brand purchased from Mezzo Ltd; iii.Costs related to the research for a new prototype device the Pico Dynamo -developed by Giant Ltd; iv.Further development costs of the Pico Dynamo device to finalise the design; v.Patent in relation to the Pico Dynamo device and expenditure establishing thePico Dynamo brand; vi.Expenditure on developing relationships with customers, suppliers andemployees under the heading of goodwill expenditure in the marketing andhuman resources budgets. Explain the definition of an intangible asset and the criteria for recognition. For each item of expenditure listed above, explain if it can be capitalised on the Giant Group Statement of Financial Position, giving reasons for the treatment.

Tiny 000 Giant 000 3,000 -1500 1,500 -100 -150 1,250 30 -70 1,210 Sales Cost of sales Gross profit Distribution costs Administrative expenses Operating profit Dividends received Taxation Profit for the year Other comprehensive income Gain on property revaluation Total comprehensive income 750 -300 450 -25 -30 395 -50 345 40 1,250 30 375