QUESTION 2 (35) You are the newly appointed financial manager of ABC Ltd, a company specializing in the supply of The movement in intangible assets was as follows in the year ended 28 February 2021: Model:

N$ Balance at the beginning of the year = 218 666.67 Amortization = 64 000 Balance at the end of the year = 154 666.67 Fair Value as at 28 February 2021 = 120 000 Fair Value as at 28 February 2022 = 90 000.00

The business acquired the model on July 4, 2018, for N$320,000. The design was implemented throughout the fiscal year that ended on February 28, 2019. For the year that concluded on February 28, 2022, no journal entries for amortization and impairment losses have yet been processed as the previous accountant has been on a promotion strike for 6 months before you were appointed as the new accountant. Trademarks and goodwill: The board of directors of ABC Ltd intends to spend a sizeable sum on developing and acquiring their own trademarks over the upcoming fiscal year. They also intend to buy an 80% stake in one of their rivals in order to stay competitive, which will generate goodwill. The directors of ABC Ltd believe that when they have a significant enough market share, they will be able to value internally generated goodwill. There is currently no accounting regulation in place regarding how to treat these intangible assets.

REQUIRED: a) Prepare journal in the books of ABC limited, for the amortization, impairment loss/ Impairment loss reversal for the financial year ended 28 February 2021 and 2022.

b) Formulate a relevant accounting policy for ABC Ltd in respect of the accounting treatment of trademarks and goodwill as indicated in point 1 above. c) List the requirements to be fulfilled for the initial recognition of internally generated software as intangible assets.