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QUESTION 4 (20 MARKS) On 1 January 2018 XYZ Berhad succeeded to acquire a licence from the local authority to operate a night club exclusively
QUESTION 4 (20 MARKS) On 1 January 2018 XYZ Berhad succeeded to acquire a licence from the local authority to operate a night club exclusively in Johor Bahru. The licence is worth RM550,000 with a useful life of 4 years. XYZ Bhd was the sole operator of the club. Years later, due to the high demand for such club, the local authority had given licences to other operators. As at 31 December 2020, the present value of expected future cash flow and the selling price less cost to sell of the licence is RM120,000 and RM,110,000 respectively. Required: MFRS 138 Intangible Assets defines as intangible asset as identifiable non-monitory assets without physical substance. Determine the THREE (3) characteristics of intangible asset. (6 marks) (CLO2:PLO7:04) b. Explain the accounting treatment for the licence for the year ended 31 December 2018. (7 marks) (CLO2:PLO7:04) c. Compute the impairment loss (if any) for the licence for the year ended 31 December 2020. (7 marks) (CLO2:PL07:C4)
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