Briefly explain the accounting treatment of franchise fee

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Question - Marvelicious Sdn Bhd is a local company based in Kampar, Perak. On 1 February 2020, Marvelicious Sdn Bhd signed an agreement to operate as a franchise of a wellknown fast food outlet. The initial franchise fee was RM900,000. The franchise agreement is for a period of 10 years. On 1 March 2020, before the franchise was opened, the company hired and trained new sales staff at a cost of RM100,000. It was expected that the benefits derived from the training could last for 4 years. The company's financial year ends on 31 December each year. Briefly explain the accounting treatment of franchise fee in accordance with MFRS138 Intangible Asset.

Reference no: EM132967694

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