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Solution Tests 1

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6 views3 pages

Solution Tests 1

Uploaded by

fasihanaveed36
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Q-1

Zafar Limited
Notes to the Financial statements
For the year ended December 31,2020

Intangible assets Rs in million


Patents Software Brands Development License
Cost

COST/ REVALUED AMOUNT


Balance as at start of year 2000 4,000.00 800.00 - - M-0.5 each
Additions - 1,375.66 388.89 300 M-1 each
Disposals - - - -
Revaluation - - (390.00) - - M-1 each

Balance as at end of the year 2,000.00 5,375.66 410.00 388.89 300.00

Accumulated Amort. & Impairment


Balance as at start of year 600 800.00 160.00 - - M-1 each
Amortization For the year 200.00 1,726.10 160.00 3.24 16.67 M-1 each
Disposals - - - - -
Revaluation - - (320.00) - - M-2
Impairment loss for the year 120.00 - - - - M-3

Balance as at end of the year 920.00 2,526.10 - 3.24 16.67

Net book value as at 31st December 2020 1,080.00 2,849.56 410.00 385.65 283.33
Useful life 10.00 2-10 10.00 10.00 9 M-0.5
Method of amortization SLM SLM SLM SLM

13.1 Revaluation Surplus


Balance at start of year 240.00
Transfer to Retained earnings (60.00)
Revaluation during the year (70.00)
Balance at end of year 110.00 M-2 each

(w-1) Software
old software 3200/2*12/12 1600

New software
cash 1,000.00
defer payment 375.66
(500x1.1^-3)
1,375.66 1375.66/10*11/12 126.10

1726.102
A2
(i) License is an identifiable non-monetary asset without physical substance therefore should be recognized as intangible
asset at a cost of Rs._ 10 million. Although renewal cost • insignificant but renewal is not expected therefore it should be
amortized over 5 years. Amortization for the year ending December 31, 2021 will be Rs. 2 million {10m x 1/5]

(ii) Expenditure of Rs. 3 million incurred on advertising shall not be recognized as asset rather it should be charged as
expense as entity cannot exhibit control over it.
(iii) Entire amount of Rs. 4 million paid for acquisition of in-process R&D project should be capitalized as intangible asset as
all capitalization conditions seem to be fulfilled. Moreover no amortization will be charged for the year as project is not
yet complete.

(iv)
Website (IAS38) ------ Rs. million ----- IAS 16 ------ Rs. million -----
Registration of domain names 3.00 PPE
Stress testing 18.00 Web servers 40
Designing apearance of web site 20.00 Operating system 12

41.00 52.00
(i) (b)
(ii) (b)
(iii) (a) &(c)

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