Topic: Impairment of Assets

b. During the year ended 31 December, 2018 Soft Solutions Limited carried out
the following transactions:

• N720m was spent on developing a new “Microfinance Software” which
  received the approval of software regulatory authority in Nigeria on 1 July,
  2018 and is proving commercially successful.
  The financial controller expects the project to be in profit within 12 months
  of the approval date. The patent was registered with Federal Ministry of
  Trade and Investment on 1 July, 2018; it costs N180m and remains in force
  for three years.
• On 1 September, 2018 Soft Solutions Limited acquired an up to date list of
  Global Positioning System (GPS) at a cost of N60m and the company has
  been visiting the tracked customers to explain the operations of the new
  microfinance software in rural and urban areas. This is expected to generate
  sales throughout the life-cycle of the microfinance software.
• A research project was set up on 1 October, 2018 which is expected to result
  in a new banking software called “Recent Bankers”. N24m was spent on
  computer equipment and N48m on staff salaries. The equipment has an
  expected life of four years

Required:

Using the above information:
i. Prepare the extract of statement of financial position of Soft Solutions
Limited as at 31 December, 2018. (5 Marks)
ii. Prepare the summary of the cost to be charged to statement of profit or
loss for the year ended 31 December, 2018. (2 Marks)