Reference no: EM132576300

Question - Meekness, Inc. has been considering the accounting treatment of its intangible assets and has asked for your opinion on how the matters below should be treated in its financial statements for the year ended March 31, 2019.

Meekness has developed and patented a new drug which has been approved for clinical use. The costs of developing the drug were P18 million. Based on early assessments of its sales success, independent valuers have estimated its market value at P30 million.

Meekness's manufacturing facilities have recently received a favorable inspection by the government medical scientists. As a result of this, the company has been granted an exclusive five-year license to manufacture and distribute a new vaccine. Although the license had no direct cost to Meekness, its directors feel its granting is a reflection of the company's standing and have asked independent valuers to measure the license. Accordingly, they have placed a value of P15 million on it.

In the current accounting period, Meekness has spent P4.5 million sending its staff on specialized training courses. While these courses have been expensive, they have led to a marked improvement in production quality and the staff now needs less supervision. This in turn has led to an increase in revenue and cost reductions. The directors of Meekness believe these benefits will continue for at least three years and wish to treat training costs as an asset.

In December 2018, Meekness paid P7.5 million for a television advertising campaign for its products that will run for 6 months from January 1 to June 30, 2019. The directors believe that increased sales as a result of the publicity will continue for two years from the start of the advertisements.

Compute the total amount to be recognized as assets in Meekness's March 31, 2019 balance sheet. (Ignore amortization).