Reference no: EM133020089

Question - Information concerning SMC Corporation's intangible assets is as follows.

i. SMC incurred Tk 650,000 of experimental and development costs in its laboratory to develop a patent that was granted on January 1, 2018. Legal fees and other costs associated with registration of the patent totaled Tk 17,600. SMC estimates that the useful life of the patent will be 8 years. The patent has yet to achieve economic viability.

ii. A new technology was purchased from Unesco Company for Tk 360,000 on July 1, 2018 and received a discount of Tk 15,000. Expenditures for successful litigation in defense of the technology totaling Tk 50,200 were paid on July 5, 2018. In addition, staff training incurred in operating the new process is Tk 80,000. SMC estimates that the useful life of the technology will be 20 years from the date of acquisition.

Required -

a. Prepare schedule showing the intangible assets section of SMC's statement of financial position at December 31, 2018 according to IAS-38. Show supporting computations and give explanations for individual case.

b. Prepare schedule showing all expenses resulting from the transactions that would appear on SMC's income statement for the year ended December 31, 2018 according to IAS-38. Show supporting computations and give explanations for individual case.