Question No: 1 10 Marks

Case (a): Entity X acquired a computer-controlled machine for production purposes together with software. The purchase price of that machine was OMR 17,500 and the cost of software was OMR 2,500 which is included in the purchase price of machine. Without the software the machine would not be able to operate. As the machine tangible and it is more than the software which is an intangible.

Case (b): Entity Y is engaging in selling various computer hardware and software. It has produced a new computer game. The Hardware instrument is sold for OMR 150 and software used in that instrument is an integral part. Without the software the instrument not function Entity Y sells this game to its customers in the ordinary course of business.

Case (c): Entity Z is producer and seller of computer software. The company created an accounting software program that is marketed all over the world. The customers who want to purchase needs to download the software program freely. The company will collect OMR 390 through online for activation and license and the license will have a validity of one year. The same accounting software program is used by Entity Zs employees for handling the companys accounting process.

Required:

Explain the above category of assets separately and also assess which standard has to be applied by Al Shams Company to the items described above and also explain the process of measurement and recognition of those assets separately. (Case a: 3 Marks, Case b: 3 Marks, Case c; 4 Marks)

Question No:1 10 Marks Case (a): Entity X acquired a computer-controlled machine for production purposes together with software. The purchase price of that machine was OMR 17,500 and the cost of software was OMR 2,500 which is included in the purchase price of machine. Without the software the machine would not be able to operate. As the machine tangible and it is more than the software which is an intangible. Case (b): Entity Y is engaging in selling various computer hardware and software. It has produced a new computer game. The Hardware instrument is sold for OMR 150 and software used in that instrument is an integral part. Without the software the instrument not function Entity Y sells this game to its customers in the ordinary course of business. Case (c): Entity Z is producer and seller of computer software. The company created an accounting software program that is marketed all over the world. The customers who want to purchase needs to download the software program freely. The company will collect OMR 390 through online for activation and license and the license will have a validity of one year. The same accounting software program is used by Entity Z's employees for handling the company's accounting process. Required: Explain the above category of assets separately and also assess which standard has to be applied by AI Shams Company to the items described above and also explain the process of measurement and recognition of those assets separately. (Case a: 3 Marks, Case b: 3 Marks, Case c; 4 Marks) Page 3 of 7