A. Sireh Bhd operates a chain of traditional homestays in Negeri Sembilan. The company decided...
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A. Sireh Bhd operates a chain of traditional homestays in Negeri Sembilan. The company decided to promote aggressively its homestays chain to local and international tourists by emphasizing on an exclusive and modern designed wooded of traditional Malay houses. On 1 January 2018, it acquired a corporate customers' list for RM250,000 and is estimated to be valid for 5 years due to frequent revision of new customers in the tourism industry. On 31 December 2020, the fair value of the customer list was RM80,000. Intangibles asset is measured using revaluation model. Required: i. Explain the accounting treatment for the customer list on the year ended 31 December 2020. (4 marks) ii. Show the journal entries to record the transactions for the year ended 31 December 2020. (4 marks) B. On 1 January 2020, Daun Bhd acquired a franchise for RM5,500,000. It has a legal life of 4 years and renewable at the end of every 4 years, and the company intends to renew it indefinitely. The fair value less cost to sell as at 31 December 2020 was RM4,800,000. Required: Explain the accounting treatment for the franchise for the year ended 31 December 2020. (2 marks)
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