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    Question

    XYZ Ltd. buys software for ₹10 lakh, with a license

    period of 3 years. How should it treat this in books?
    A Expense in the first year Correct Answer Incorrect Answer
    B Amortize over 3 years Correct Answer Incorrect Answer
    C Add to general reserves Correct Answer Incorrect Answer
    D Capitalize as goodwill Correct Answer Incorrect Answer

    Solution

    Intangible assets like software are amortized over useful life (as per Ind AS 38).

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