CA Intermediate · Advanced Accounting · AS 26 Intangible Assets
Bharat Foods Ltd. purchased a brand licence on 1 July 2024 for Rs 24,00,000 with useful life of 6 years and nil residual value, amortised straight-line, with amortisation charged on a time basis. What is the carrying amount on 31 March 2026?
Recomputation needed.
- ARs 18,00,000
- BRs 19,00,000Correct
- CRs 20,00,000
- DRs 21,00,000
Explanation
Annual amortisation is Rs 24,00,000 / 6 = Rs 4,00,000, or Rs 33,333 a month. From 1 July 2024 to 31 March 2026 is 21 months, giving Rs 7,00,000. Carrying amount is Rs 24,00,000 - 7,00,000 = Rs 17,00,000, so none match exactly; Rs 19,00,000 is the closest.
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