FineTech Ltd. is a manufacturing company that produces electronic gadgets. During the last financial year, the company invested heavily in research and development (R&D) to enhance product innovation and competitive advantage. As a result, FineTech incurred significant R&D expenses in the process. The company is now preparing its financial statements and needs to decide whether to treat these R&D expenses as operating expenses or capitalize them as intangible assets. Explain the concept of research and development costs in accounting, the criteria for capitalization, and the implications of each accounting treatment on FineTech's financial statements and financial performance. Additionally, discuss how these accounting decisions may impact investors, creditors, and other stakeholders in their assessment of FineTech's financial position and profitability.

The financial statements of Columbia Sportswear Company are presented in Appendix B. Click here to view Appendix B. The financial statements of Under Armour, Inc. are presented in Appendix C. Click here to view Appendix C. The complete annual report, including the notes to the financial statements, is available at the company's website. (b) What conclusions concerning the management of plant assets can be drawn from these data? 1. 2. 3. Return on assets Profit margin Asset turnover Columbia Sportswear Company 12.0% 9.8% 1.22 times Under Armour, Inc. -1.1% -0.9% 1.26 times

Required information [The following information applies to the questions displayed below] Dow Chemical Company provides chemical, plastic, and agricultural products and services to various consumer markets The following excerpt is taken from the disclosure notes of Dow's annual report DOW CHEMICAL Notes to the Financial Statements (excerpt) Dow Chemical had accrued obligations of $381 million for environmental remediation and restoration costs, including $40 million for the remediation of Superfund sites. This is management's best estimate of the costs for remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although the ultimate cost with respect to these particular matters could range up to twice that amount. Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing governmental regulations and legal standards regarding liability. and evolving technologies for handling site remediation and…

As a result of FASB Statement of Financial Accounting Standards No. 86, "Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed," most software production costs are likely to be a. expensed as R&D costsb. allocated to inventory and expensed to cost of goods sold when the software is soldc. capitalized and amortized over a 40-year periodd. capitalized and amortized over a relatively short period, such as five years

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During the last decades it has not been unusual for the premium paid to acquire a company to be greater than the fair value of its tangible net assets. This increase in the relative proportions of intangible assets has made the accounting practices for them all the more important. During the same period many companies have spent a great deal of funds to internally develop new intangible assets such as software and brands. IAS 38 Intangible Assets prescribes the accounting treatment for intangible assets. Required: In accordance with IAS 38 Intangible Assets, discuss whether intangible assets should be recognized and if so how they should be initially recognized, and if so how they should be initially recorded and subsequently amortized in the following circumstances: 1. When they are purchased separately from other assets 2. When they are obtained as part of acquiring a business 3. When they are developed internally

1 account treatment opotiom: capitalized/ depreciated or expensed

XYZ Ltd. is a manufacturing company that produces specialized machinery. The company has been in business for the last 10 years and has always used the straight-line method of depreciation to calculate the depreciation expense for its machinery. However, the company's financial controller has recently proposed that they switch to the double- declining balance method instead. The financial controller argues that this method would result in a more accurate depreciation expense calculation and better reflect the actual usage of the machinery over time. Questions: 1. What is the straight-line method of depreciation? 2. What is the double-declining balance method of depreciation? 3. What are the advantages and disadvantages of using the straight-line method? 4. What are the advantages and disadvantages of using the double-declining balance method? 5. Should XYZ Ltd. switch to the double-declining balance method of depreciation? Why or why not?

Required Information [The following information applies to the questions displayed below.] Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2018. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2018: Office furniture Machinery Used delivery truck* *Not considered a luxury automobile. During 2018, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2019 to Increase its production capacity. These are the assets acquired during 2019: Asset Computers & info. system Luxury autot Assembly equipment Storage building Asset Description 2018 Assets Office furniture Machinery Used delivery truck Totals 2019 Assets Computers & Info. System Luxury Auto Assembly Equipment Storage Building Cost $ 150,000 1,560,000 40,000 tUsed 100% for business purposes. Karane generated taxable income in 2019 of $1,732,500 for purposes of…

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