Question 2

ABC Limited has incurred the following expenditures during the current year.

(a) The company acquired a patent in January 2022 for $500,000. The patent is amortised on a straight line basis over its remaining legal life. The expected useful life is 10 years.

(b) A brand name related to a specific range of high tech products, purchased for $600,000. By the year end, a brand specialist had valued this at $800,000. The expected useful life is indefinite and no active market exists for that high tech products.

(c) Training costs for staff to use a new computerized system. The total training costs amounted to $300,000 and staffs are expected to remain for an average of 5 years.

Advise and Explain the accounting treatment(s) for the above issues separately.