NOTES TO THE FINANCIAL STATEMENTS
Note 6: Intangible assets (continued) E-commerce website
Previous site As at 30 June 2020 the company had a website with a cost of $30,000, accumulated amortisation of $9,000 and a book value of $21,000. The website was being written down over 5 years at $6,000 per year. At 30 June 2021 the website had a cost of $30,000, accumulated amortisation of $15,000 and a book value of $15,000. A decision was made prior to 30 June 2021 to replace the website. On that basis the remainder of the book value was expensed at that date. New site During the 2021 financial year the Company incurred costs of $176,016 for a new site which have been capitalised. The new site began sales on the 30th of August 2021. Product trademarks The Company owns a number of trademarks for owned brand products including Organic Road, Natural Road and NutriVital. These are successful brands which generate significant gross profit to the Company. As at 30 June 2021 the gross carrying value is $59,615 with accumulated amortisation of $4,178 and a book value of $55,437. Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the Consolidated Statement of Profit or Loss. Amortisation is calculated on a straight-line basis over the estimate useful lives of the assets as follows: Trademarks – 10 years Webpage – 5 years
GO VITA GROUP LIMITED ANNUAL REPORT 2020-2021 I 55
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