Answer: 13,284.

## Explanation To calculate the carrying value of licenses as of 31 December Year 2, we need to work through the following steps: **Step 1: Understand the starting position** - Net book value as of 31 December Year 1 = 12,118 - Accumulated impairment losses and amortization as of 31 December Year 1 = 2,142 - This means the original cost as of 31 December Year 1 was: 12,118 + 2,142 = 14,260 **Step 2: Calculate the accumulated impairment and amortization as of 31 December Year 2** Starting accumulated balance (31 Dec Year 1): 2,142 Add: Exchange movements: 212 Add: Amortization charge for the year: 752 Add: Impairment losses: 52 Less: Transfers to investments in associated undertakings: (7) Total accumulated impairment and amortization as of 31 Dec Year 2: 2,142 + 212 + 752 + 52 - 7 = 3,151 **Step 3: Calculate carrying value as of 31 December Year 2** Carrying value = Cost - Accumulated impairment and amortization Cost as of 31 December Year 2 = 16,435 (given) Accumulated impairment and amortization as of 31 December Year 2 = 3,151 Carrying value = 16,435 - 3,151 = 13,284 **Step 4: Verify with alternative calculation** We can also calculate using the net book value approach: - Starting net book value (31 Dec Year 1): 12,118 - Add: Exchange movements: 212 - Less: Amortization charge: (752) - Less: Impairment losses: (52) - Add: Transfers to investments: 7 (note: this is negative in the table, so adding 7) - Adjust for cost changes: The cost increased from 14,260 to 16,435, an increase of 2,175 Net book value = 12,118 + 212 - 752 - 52 + 7 + 2,175 = 13,284 **Conclusion:** The carrying value of licenses as of 31 December Year 2 is 13,284, which corresponds to option B.

Author: LeetQuiz .