QUESTION THREE [25] On the 1 January 2018, Easy Stone Limited, acquired the popular brand, Just Brick It for an amount of R3 500 000 which was paid in full on this date. Legal fees of R150 000 was spent in acquiring this brand. The legal fees were paid on the 31st of March 2018. Staff training on the brand and its operations amounted to R100 000. Training took place in March and April 2018 to allow for trading from the 1st of June 2018. Sales of this brand commenced from the 1 June 2018.

Required: 3.1. Discuss with reason whether Just Brick It can be recognized as an Intangible asset with reference to IAS 38. (15)

3.2. What is the correct accounting treatment for Just Brick It in the financial statements of Easy Stone (Pty) Ltd.