Respuesta :
Answer:
Purchase of copyright:
Copyright $390000
Cash/bank $390000
Amortization:
Amortization expense $20526
Copyright $20526
Explanation:
Under IAS 38 purchased copyrights/patents and goodwill should be recorded as intangible non-current assets. The initial measurement of such intangible non-current assets should be at cost (i.e purchase price plus directly attributable costs incurred to bring the asset for it's intended use). The subsequent measurement may be either using the cost and/or revaluation basis. But IAS 38 clearly states that in order to use the revaluation model an active market should exist which is not possible for intangible assets because of their exclusivity and uniqueness therefore in most cases the subsequent measurement is also at cost.
The entries are as follows.
Purchase of copyright:
Copyright $390000
Cash/bank $390000
The copyrights have a useful life of 19 years so the amount of amortization is calculated by dividing the cost upon useful life.
Amortization amount per annum = $390000÷19
Amortization = $20526
Amortization:
Amortization expense $20526
Copyright $20526
