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11. Which of the following CANNOT be recognised as an intangible non-current asset in GHK's statement of financial position at 30 September 2019? * (2 Points) GHK purchased a brand name from a competitor on 1 November 2018, for $65,000. GHK spent $21,000 during the year on the development of a new product, after management concluded it would be viable in November 2018. The product is being launched on the market on 1 December 2020 and is expected to be profitable. GHK purchased a subsidiary during the year. During the fair value exercise, it was found that the subsidiary had a brand name with an estimated value of $50,000, but was not recognised by the subsidiary as it was internally generated. GHK spent $132,000 developing a new type of product. Testing proved that the product was successful in June 2019 but management worried that it would be too expensive to fund. The finances to complete the project came from a cash injection from a benefactor received in November 2019. 12. Repro, has prepared its draft financial statements for the year ended 30 September 2019. It has included the following transactions in revenue at the stated amounts below. Which of these has been correctly included in revenue according to IFRS 15 Revenue from contracts with customers? * * (2 points) Sales of $150,000 on 30 September 2019. The amount invoiced to and received from the customer was $180,000, which includes $30,000 for ongoing servicing work to be done by Repro over the next two years. Option 2 Sales of $200,000 on 1 October 2018 to an established customer which (with the agreement of Repro) will be paid in full on 30 September 2020. Repro has a cost of capital of 10%. Agency sales of $250,000 on which Repro is entitled to a commission. Sale proceeds of $20,000 for motor vehicles which were no longer required by Repro. 13. Which of the following is NOT an indicator of impairment? * (2 Points) The estimated net realisable value of inventory has been reduced due to fire damage although this value is greater than its carrying amount An increase in interest rates which increases the discount rate an entity uses. The carrying amount of an entity's net assets is higher than the entity's number of shares in issue multiplied by its share price. Advances in the technological environment in which an asset is employed have an adverse impact on its future use. 14. Which ONE of the following could be classified as development expenditure in Maxim Ltd's statement of financial position as at 31 March 2020 according to IAS 38 Intangible Assets? 5 (2 Points) A payment of $50,000 to a local university's engineering faculty to research new environmentally friendly building techniques $120,000 spent on developing a prototype and testing a new type of propulsion system. The project needs further work on it as the system is currently not viable. $35,000 developing an electric bicycle. This is near completion and the product will be launched soon. As this project is first of its kind it is expected to make a loss. $65,000 developing a special type of new packaging for a new energy efficient light bulb. The packaging is expected to reduce M's distribution costs by $35,000 a year. 15. IAS 16 Property, Plant and Equipment requires an asset to be measured at cost on its original recognition in the financial statements. EW Ltd (EW)used its own staff, assisted by contractors when required, to construct a new warehouse for its own use. Which ONE of the following costs would NOT be included in attributable costs of the non-current asset? (2 points) Clearance of the site prior to work commencing EW's own staff wages for time spent working on the construction An allocation of EW's administration costs, based on EW staff time spent on the construction as a percentage of the total staff time Professional surveyors' fees for managing the construction work
