Question

Public sector entity A has incurred the following expenditure prior to commercial production of a new fire resistant door for use in public buildings.

Marketing campaign	€30,000
Royalty payment to inventor	€15,000
Training staff in door production	€10,500

What cost can public sector entity A include as an intangible development asset in accordance with IPSAS 31 'Intangible Assets'?

Nil

€15,000

€25,500

€55,500

 

 

Answer 1

The correct answer is $15,000.

 

As per IPSAS 31, Intangible assets Cost of advertising or promotional activities of a new product and cost of staff training for the new product are not form part of intangible assets

 

So only $15,000 Royalty payment to vendor is form part of intangible asset.

So only $15,000 Royalty payment to vendor is form part of intangible asset.