Total Marks 3
Starting Date Tuesday, January 21, 2020
Closing Date Monday, January 27, 2020
Status Open
Question Title GDB # 1
Question Description

A renowned cellular and telecommunication company has acquired 5G license for PKR 50 million. The company’s management has two options as under:

The Company may develop 5G wireless network to expand their customer base. This project is expected to complete within 5 years. For this, the company must acquire a bank loan of PKR 100 million for a period of 5 years. The company has another option to further sell the 5G license to any third party.

Required: For each of the above option, describe the accounting treatment on capitalization of the license and the related borrowing cost under the related IASs. Journal entries are not required.

(Your answer should not be more than 100 words)

Important Instructions:

Use the font style “Times New Roman” and font size “12”. Your answer should be relevant to the topic i.e. clear and concise. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course. Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references. You should post your answer on the Graded Discussion Board (GDB), not on the Moderated Discussion Board (MDB). Both will run parallel to each other during the time specified above. Therefore, due care will be needed. Obnoxious or ignoble answer should be strictly avoided. You cannot participate in the discussion after the due date via email. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.

For planning your semester activities in an organized manner, you are advised to view schedule of upcoming Assignments, Quizzes and GDBs in the overview tab of the course website on VULMS

Ø For Detailed Instructions please see the GDB Announcement