Problem
Cranfield is a public limited company that operates a national chain of supermarkets, selling groceries and other household goods. It prepares its financial statements in accordance with International Financial Reporting Standards.
On 1 January 2021 Cranfield purchased a ten-year pharmacy license for $20 million and opened pharmacies in some of its larger stores. As a result, Cranfield had to spend $2 million training and recruiting pharmacists, $1.2 million marketing its new products and $4 million on furniture and fittings for the new pharmacies.
Task
Discuss how the above transactions should be dealt with in the financial statements of Cranfield for the year ended 30 June 2021.