Internal Code: MAS6285
Assume that you are a graduate accountant working for Magenta and Associates a public accounting firm situated at 718 Geelong Street, Melbourne, VIC 3000. The manager of your firm, Ms Lisa Magenta has asked you to draft a letter in response to an email received from a client – Mr Christopher Sampson, the Managing Director of Beachlife Ltd, raising a number of issues regarding his company
At our recent board meeting, several directors raised concerns about an intangible asset relating to a brand name ‘Sun ‘n Surf Shirts’ which has been successfully developed by the business over the past decade. The directors want to recognize $800,000 for this asset as at 30 June 2018, being a ‘directors’ valuation’. Could you please provide advice on the correct presentation of such intangible assets and any potential changes in accounting policy?