The following information relates to EE plc:

(i) Purchased a brand in 2002 for RM 2 million. The directors believe the brand is now worth RM 7 million. This brand is a very specialized brand and specific for EE plc.

(5 marks)

(ii) Acquired a patent in January 2014, with ten years left to run, for RM350,000.

(5 marks)

(iii) Bought a fishing quota to catch 1,000 tonnes of fish for RM1,000 per tonne on 1 January 2019. The market value for the quota, for which there is an active market, was RM 1,400 per tonne on 31 December 2019.

(6 marks)

(iv) Acquired a bus operating licence on 30 June 2019 to operate routes for the next eight years. The initial price paid was RM480,000. A further RM120,000 is payable on 1 January 2020. In addition the company directors and senior management spend time (costed at RM80,000) in developing the bid.

(7 marks)

(v) A major advertising campaign was carried out in the autumn of 2019. The directors believe the main benefits of this will arise in 2020.

(2 marks)

The company policy of the company in respect of intangible assets are as follows:

(a) Amoetization: on a straight line basis over:

Quota 20 years

Brands 20 years

Patents, licence, etc remaining legal life when acquired

(b) Valuation: intangible assets for which there is an active market are revalued annually.

Required:

Explain how each of the above items should be dealt with in the accounts of EE plc (as per MFRS138) for the year to 31 December 2019, and prepare the journal entries to show the adjustments for each of the items in preparing the accounts to 31 December 2019.

(Total 25 marks)