Write a memorandum to respond to Smith Ben query

Assignment Help Accounting Basics
Reference no: EM132715393

Question - Smith Ben, the new accountant of Prospect Limited, a pharmaceutical company, is unsure about how to account for the research and development costs. He believes that all associated research and development costs should be expensed as running costs of the business and that these costs will not always results in future economic benefits flowing to the company. However, the previous accountant had capitalized costs incurred on research and development as he felt that it added to Prospect Limited's income generating structure and that this value would last for more than one period. Smith Ben has asked you for advice on this matter.

Required - Write a memorandum to respond to Smith Ben query regarding how to recognize the research and development costs. Your discussion should include reference to both the Conceptual Framework and IAS 38 Intangible Assets.

Reference no: EM132715393

Questions Cloud

What is the company contribution margin percentage : Bikes Manufacturing produces and sells children's bikes at an average price of $120. Its costs are as follows: direct materials. $12; direct labour.
Strategies for profiting from a falling market : Pick one of the stock market bubbles that burst in the past and explain how did the market bubble form? Did the market bubble you selected persist?
What is the profitability index of the project : What is the profitability index (PI) of the project, if the company's cost of capital is 9.81 percent?
Explain the use of flasher box : Explain the use of a Flasher Box. Why would the investigator be considered with EEPROM?
Write a memorandum to respond to Smith Ben query : Write a memorandum to respond to Smith Ben query regarding how to recognize the research and development costs
How would the budget process for the service company differ : Select a for profit service company and describe the process it would use to create a master budget. How would the budget process for the service company.
Determining the firm cost of capital : The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firm's beta is 0.96.
Film represents contribution to the field of cyberlaw : Review ONE of the following films and tell how that film represents a contribution to the field of CyberLaw.
What is the amount of depletion that should be recorded : Frederick Mining Company owns a large parcel of land which costs $850,000. It is estimated to contain 1,500,000 tons of recoverable ore.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd