Reference no: EM132936622

During the 2015-2016 period, Larry Energeria Ltd acquired a patent for heating glazing unit, as well as incurring expenses in relation to the development of a new power generation brick that it expects to patent for subsequent use.

i. Patent, heating glazing unit (a laminated automotive glazing unit joined by a thermoplastic interlayer and busbars) was acquired from a Maxwell Premium Technology company, China on 1 October 2015 for $525,000. Given the continued demand for heating glazing unit, it is expected that the life of this patent is indefinite.

ii. Larry Energeria Ltd continued to incur expenses in relation to the development of a new power generation brick, which it expects to patent for subsequent use. Expenses incurred were:
1 November 2015 $60,000
10 December 2015 $45,000
2 May 2016 $62,000

Following the work done up to 10 December 2015, Larry Energeria Ltd believed that the project had progressed from the research stage to the development stage as it was now technically feasible to that the company would be able to use the project results in its manufacturing process when the project was completed.

Problem 1: Explain the appropriate accounting procedures for heating glazing unit and development of the new power generation brick and prepare journal entries as well. Justify your answer with reference to AASB standards.