Goodwill is to be impaired by 18%, with the impairment charged to other operating expenses. The patent is to be amortised over 18 years to a nil residual value, charged to other operating expenses, while the trademark and copyright are both amortised over a 13-year period, with charges going to cost of sales.

On February 28, 2022, the entity acquired a brand for $81 million, but the transaction has not yet been recorded or otherwise accounted for in the books. The brand should be fully amortised over a 22-year period, with charges going to cost of sales and time-apportioned as necessary.

Of the total R&D cost on record, 60% relates to research cost, while the balance relates to development. Three-eighths of the amount recognised as development cost was incurred between 6 September 1, 2021 to November 30, 2021. The product achieved commercial feasibility on December 1, 2021. Any capitalised development cost is to be amortised over twelve years and charged to cost of sales, with time apportionment where necessary. Any non-capitalised research and development cost should be charged to other operating expenses.

The contingent liability reflected in the trial balance relates to a customer lawsuit for which the chance of payout has been deemed as possible by the entitys attorneys. The amount was recorded in other operating expenses.

The entitys attorneys have also advised that another lawsuit with which the company is currently faced has a probable chance of payout of $3.6 million. This amount has not been accounted for. Similar transactions are usually recorded in other operating expenses.

Neither of these transactions will have an effect on the accumulated temporary differences noted below