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Calculate the carrying amount of the development patent

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Reference no: EM132571185

The Foundation has a 30 September 2020 year end. The following information relates to the research and development of the patent: Research start date 1 December 2019 Development start date 1 March 2020 IAS 38 recognition criteria met by to commence capitalisation 1 June 2020 Development to be completed and patent to be brought into use 31 August 2020

Research consulting fees N$580 000

COVID 19 Project manager salary (salary incurred evenly over full project) N$350 000

Raw materials for vaccine prototype (development) N$210 000

Scientific specialist to trial run vaccine prototype on monkeys (development) N$63 000

Legal cost of filing the Patent (development) N$140 000

Equipment used in development of vaccine (original cost) N$1 150 000

Additional information:

  • The Foundation anticipates to amortise the patent over a useful life of 15 years.
  • Equipment used in the development of the patent has a useful life of 5 years.
  • All development costs were incurred evenly over the development phase of the project.

REQUIRED:

Question 1: Calculate the research expense, development expense, and development patent cost as it would appear in the accounting records of the Bill and Malinda Foundation for the year ended 30 September 2020.

Question 2: Calculate the carrying amount of the development patent as at 30 June 2020.

Reference no: EM132571185

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