Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 11, Problem 28P
a.
To determine
Determine the appropriate accounting for research and development costs for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS.
b.
To determine
Prepare the entry that Company T would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert U.S. GAAP balances to IFRS.
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Services Ltd incurred research and development costs of $10 million on a project to develop product A in 2018. The research phase can be clearly distinguished from the development phase of the project. Total costs in the research phase are $6 million, and in the development phase total costs are $4 million. All of the IAS 38 criteria have been met for recognition of the development costs as an asset. Product A was brought to market in Year 2019 and is expected to be marketable for five years. Total sales of Product A are estimated at more than $100 million.
Required:
Summarize the difference in income, total assets, and total shareholders’ equity related to Product A over its five-year life under the two different sets of accounting rules.
Figures need to be presented in a table showing what happens every year to the value and what the value will be at the end of the 5 year life.
Services Ltd incurred research and development costs of $10 million on a project to develop product A in 2018. The research phase can be clearly distinguished from the development phase of the project. Total costs in the research phase are $6 million, and in the development phase total costs are $4 million. All of the IAS 38 criteria have been met for recognition of the development costs as an asset. Product A was brought to market in Year 2019 and is expected to be marketable for five years. Total sales of Product A are estimated at more than $100 million.
Required:
Explain the research and development expenditure related regulations of IAS and US GAAP.
Determine the impact research and development costs have on Services Ltd in 2018 and 2019 income under (1) IFRS and (2) U.S. GAAP.
Summarize the difference in income, total assets, and total shareholders’ equity related to Product A over its five-year life under the two different sets of accounting rules.
Services Ltd incurred research and development costs of $10 million on a project to develop product A in 2018. The research phase can be clearly distinguished from the development phase of the project. Total costs in the research phase are $6 million, and in the development phase total costs are $4 million. All of the IAS 38 criteria have been met for recognition of the development costs as an asset. Product A was brought to market in Year 2019 and is expected to be marketable for five years. Total sales of Product A are estimated at more than $100 million.
Summarize and calculate in numerical tables the difference in income, total assets, and total shareholders’ equity related to Product A over its five-year life under the two different sets of accounting rules.
this question requires the amount of money to be showed at the end of each year in a numeric table for all instances (income, assets, equity) for us GAAP and IFRS. even with no impact or amortisation the figures need to…
Chapter 11 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
Ch. 11 - Historically, what factors contributed to the...Ch. 11 - Nestl S.A. is a very large company headquartered...Ch. 11 - Prob. 3QCh. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - In general terms, how does IFRS for SMEs differ...Ch. 11 - Prob. 7QCh. 11 - What are three countries that do not allow...Ch. 11 - Prob. 9QCh. 11 - Prob. 10Q
Ch. 11 - Prob. 11QCh. 11 - What are the two extreme approaches that a company...Ch. 11 - Prob. 13QCh. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 18QCh. 11 - Prob. 19QCh. 11 - Even if all companies in the world were to use...Ch. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Which of the following is not a reason for...Ch. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - Prob. 9PCh. 11 - Prob. 10PCh. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Which of the following statements is true for a...Ch. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Prob. 16PCh. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - Prob. 20PCh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Prob. 23PCh. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Parnell Company acquired construction equipment on...Ch. 11 - Prob. 28PCh. 11 - Prob. 29PCh. 11 - Hirsch Company acquired equipment at the beginning...
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