How much are the amortisation charges for current year

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Question - Miso Co. recently disclosed R&D expenses for the previous years as the follows:

2016 - $700,000

2017 - $800,000

2018 - $1,000,000

2019 - $1,300,000

2020 - $1,700,000

2021 - $2,000,000

At current year (year 2021), the firm reported a $2 million R&D expenses. Assume the amortizable life of those R&D will last for only five years, for business valuation purpose, we need to adjust for the R&D expenses. Please answer the following questions.

Required -

Question A. How much are the amortisation charges for current year?

Question B. How much is the value of R&D asset at the end of current year?

Question C. Why R&D expenses should not be recognised as operating expenses?

Question D. How does such adjustments affect balance sheet and operating earnings?

Reference no: EM132984542

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