- 5 Marks
FR – Dec 2022 – L2 – Q5a – Intangible Assets Treatment for Employee Training
Analyze the treatment of employee training costs as an intangible asset under IAS 38.
Question
Damba Ltd spent GH¢400,000 on training courses for its employees, which has resulted in increased efficiency and cost savings. The Assistant Accountant has recognized the training costs as an intangible asset and charged six months’ amortization based on the average time within which the training courses were completed.
Required:
Comment on the Assistant Accountant’s treatment of the aforementioned transaction in Damba Ltd’s financial statements for the year ended March 31, 2022, and advise on how it should be handled under International Financial Reporting Standards.
Find Related Questions by Tags, levels, etc.
- Tags: Amortization, Employee training, Expense Recognition, Intangible Assets
- Level: Level 2
- Topic: IAS 38: Intangible assets
- Series: DEC 2022
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