Skip to content

CA Intermediate · Advanced Accounting · AS 26 Intangible Assets

Vishwa Retail Ltd. acquired a trademark in an exchange of its own equity shares on 1 July 2025. The shares issued have a fair value of ₹18 lakh, while the trademark's fair value is not reliably measurable. Legal fees of ₹1 lakh were paid to register it. At what cost is the trademark initially recorded?

The trademark is recorded at ₹19 lakh. Since it was acquired by issuing shares and its own fair value cannot be measured reliably, cost is taken as the fair value of the shares issued, ₹18 lakh, plus the directly attributable registration fees of ₹1 lakh.

  1. A₹19 lakhCorrect
  2. B₹18 lakh
  3. C₹1 lakh
  4. DNil

Explanation

Where an intangible is acquired for shares, cost is the fair value of the shares issued when the asset's fair value is not clearly evident, plus directly attributable costs. So 18 + 1 = ₹19 lakh. Omitting legal fees gives ₹18 lakh, which ignores directly attributable cost.

Did you get it right without looking?

One question tells you little. A timed set on AS 26 Intangible Assets shows your real accuracy, how long you take and where you lose marks.

Practise AS 26 Intangible AssetsFree diagnostic mock

More AS 26 Intangible Assets questions