Sbr (int/UK) Strategic Business Reporting

(1 mark) 

 

(Part (b) (ii): 6 marks max) 

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S BR  (IN T & U K) :  S TRA TE G IC  BU SINES S  RE POR TI N G 

16 

K A P LAN   P UB LI S HI NG 

Marking scheme 

   Marks 

(a) 

Deferred tax - FRS 102 vs IFRS  – 1 mark per point 

15 

(b)  

(i) 

Financial asset  – 1 mark per point 

4 

 

(ii) 

Conceptual Framework–  1 mark per point 

6 

 

 

––– 

Total  

25 

 

 

––– 

4 MEDSUPPLY 

 

Key answer tips 

Don’t be disheartened if you find this question difficult. You can score solid marks even if 

your answer is incorrect as long as you state the relevant rules from the accounting 

standards and apply these to the scenario in sensible ways. 

(a) Capitalised 

costs 

IAS 38 Intangible Assets states that an intangible asset should be recognised if it is 

probable that future economic benefits will flow to the entity and its cost can be 

measured reliably.  

(1 mark) 

Development costs are capitalised only after the technical and commercial feasibility 

of the asset have been established. Costs incurred before this cannot be capitalised. 

 

(1 mark) 

The entity must intend and be able to complete the intangible asset and either use it 

or sell it and be able to demonstrate how the asset will generate future economic 

benefits.   

(1 mark) 

In principle, the above criteria appear to be satisfied in the case of the $3 million 

costs of developing know-how. As such, this amount has been correctly capitalised.