CERTYNEX IFRS ACADEMY

Altivo, a cosmetics company, created its own brand two years ago. In 20X5, it spends 300,000 on advertising and promotion of this brand and 40,000 to train its sales advisers. The CFO proposes to recognise 340,000 as an asset labelled Altivo brand, amortised over five years, because brand awareness has clearly grown. Which position do you take?

Accept the proposal: 340,000 in assets, amortised over five years.

Recognise only the advertising of 300,000 as an asset and expense the training.

Recognise the 340,000 as an expense in 20X5.

Recognise 340,000 as an asset without amortisation, since brand awareness has no foreseeable limit.