Question
Ten years ago, I Co developed a new game called I Sports. This game sold over 10 million copies around the world and was very
Ten years ago, I Co developed a new game called I Sports. This game sold over 10 million copies around the world and was very profitable. Due to its popularity, I Co release a new game in the I Sports series every year; the games continue to be best sellers.
The directors of I Co have produced cash flow projections for the I Sports series over the next five years. Based on these projections, they have prudently valued the I Sports brand at $20 million and want to recognize this in the statement of financial position as at 30 September 2020.
On 30 September 2020, I Co also paid $1 million for the rights to the Hector videogame series.
Required:
Discuss the accounting treatment of the above in the financial statements of I Co for the year ended 30 September 2020
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