Question 19. Enterprise Co is heavily involved in developing a new production process. In the year to 31 March 20X1 the amount of expenditure incurred on development costs could be analysed as follows:

	Euro
1 April 20X0 to 30 September 20X0	18,400
1 October 20X0 to 31 March 20X1	6,500
	24,900

On 1 October 20X0 Enterprise Co demonstrated that the production process met the recognition criteria of IAS 38 Intangible Assets. The amount estimated to be recoverable from the process is 21,000. At what amount should the production process be recognised as an intangible asset at 31 March 20X1 in accordance with IAS 38?

6,500

18,400

21,000

24,900

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Question 20. Under IAS 19 Employee Benefits, which of the following statements is true in relation to accounting for pension schemes?

Remeasurements of a defined benefit scheme should be recognised immediately in profit or loss

Remeasurements of a defined benefit scheme should be deferred and spread over the average remaining working life of employees using the corridor approach

Employer contributions to a defined contribution scheme are recognised as an expense in profit or loss

Employer contributions to a defined contribution scheme increase the fair value of the pension asset in the statement of financial position.

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Question 21. On 31 December 20X4, Merigo Co sold goods to a customer for $10 million, representing a mark-up on cost of 25%. In order to encourage sales, Merigo Co has given the customer interest free credit with the total amount becoming payable in three years time. Interest rates are currently 4% per annum, meaning that the present value of $10million is $8.9million and the present value of $8million is $7.1million. What amount should Merigo Co record as revenue in the statement of profit or loss for the year ended 31 December 20X4?

$10 million

$8 million

$8.9 million

$7.1 million