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CA Intermediate · Advanced Accounting · AS 26 Intangible Assets

Ananya Foods Ltd incurred the following during 2025-26: Rs 9 lakh on staff training, Rs 15 lakh on an advertising campaign for a new brand, Rs 6 lakh on start-up costs of a new regional office, and Rs 20 lakh on purchasing a trademark from another firm. What total amount is expensed under AS 26?

Rs 30 lakh is expensed. Training (Rs 9 lakh), advertising (Rs 15 lakh) and start-up costs (Rs 6 lakh) must be charged to profit and loss as incurred under AS 26. Only the separately purchased trademark of Rs 20 lakh is capitalised as an intangible asset.

  1. ARs 30 lakhCorrect
  2. BRs 20 lakh
  3. CRs 50 lakh
  4. DRs 15 lakh

Explanation

Training, advertising and start-up costs are expensed as incurred under AS 26: 9 + 15 + 6 = Rs 30 lakh. The purchased trademark of Rs 20 lakh meets the recognition criteria and is capitalised. Rs 50 lakh would wrongly include the trademark.

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