Napama (Pty) Ltd is a custom garment manufacturing company that specializes in corporate and workwear. The company has been successfully operating from its factories across Namibia and intend to expand its operations across SADC.

Napama (Pty) Ltd is a custom garment manufacturing company that specializes in corporate and workwear. The company has been successfully operating from its factories across Namibia and intend to expand its operations across SADC.

In response to its expansion into SADC, Napama (Pty) Ltd created a website to facilitate the online sales of its goods. The website was created between 1 January 2021 and 30 June 2021 and the following costs (all paid in cash) were incurred:

	N$
A feasibility study (is online business still feasible)	15 000
Customer preference study (what would customers prefer to see and use on a website)	25 000
New licenses (to operate on the web)	12 000
Computer specialist fees for designing the website	60 000

During the year the managing director became aware of the standard on intangible assets IAS 38, for the first time. She wants to start applying this standard to the intangible assets of the company and requests your assistance. The end of the reporting period of the company is 31 December 2021. Assume an appropriate discount rate of 10%

Required	Marks
a)	Draft a memorandum to the managing director of Napama (Pty) Ltd in which you explain the following: i. The initial recognition and measurement of the Minerwear trademark in terms of the conceptual framework and IAS38. ii. Subsequent measurement of the Minerwear trademark. Communication (Logical flow and format) Show all your workings
b)	Define research and development cost and explain the correct accounting treatment of all the costs incurred in relation to the website creation.
TOTAL	26