Explain how these brands would be accounted for in the financial statements of Sela Plc

 

On 31 December 2018, Sela Plc acquired Lomo Plc which had a separately identified brand, valued at £7,600,000. In addition to this, SelaPlc also estimated at the end of 2019 that their own internally generated brand is worth £12,000,000.

Don't use plagiarized sources. Get Your Custom Essay on
Explain how these brands would be accounted for in the financial statements of Sela Plc
Just from $13/Page
Order Essay

A director has suggested that both figures should be recorded in the statement of financial position as intangible assets, as brands would strengthen their financial position.

Sela Plc is currently working towards a target gearing ratio in order to secure external funds for expansion. Both brands described have an indefinite life.

Requirement:

  1. i) With reference to the above scenario, explain how these brands would be accounted for in the financial statements of Sela Plc for year ending 31 December 2019. (maximum word count 140 words)

(7 marks)

  1. ii) How does the recognition and accounting treatment of goodwill differ from that used for brands? Explain any three differences.

(maximum word count 120 words)

(6 marks)

iii) Explain any two justifications for reporting brands as assets.(maximum word count 40 words)

(2 marks)

Total 15 Marks

Place Order
Grab A 14% Discount on This Paper
Pages (550 words)
Approximate price: -
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Try it now!

Grab A 14% Discount on This Paper

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.