In year 1, in a project to develop product X, MAC company incurred R&D costs totaling $25 million. MAC is able to clearly distinguish the research phase from the development phase of the project. Research phase costs are $10 million, and development phase are $15 million. All of the IAS 38 criteria have been met for the recognition of $10 million of the development costs of an asset. Determine how costs will be capitalized and expensed under IFRS and GAAP Select one: a. GAAP : $10mn expensed as R&D. IFRS : $10mn capitalized as Deferred development cost b. GAAP : $10mn capitalized as R&D. IFRS : $10mn capitalized as Deferred development cost c. GAAP : $10mn capitalized as R&D. IFRS : $10mn expensed as Deferred development cost d. GAAP : $10mn capitalized as R&D. IFRS : $10mn capitalized as Deferred development cost

In year 1, in a project to develop product X, MAC company incurred R&D costs totaling $25 million. MAC is able to clearly distinguish the research phase from the development phase of the project. Research phase costs are $10 million, and development phase are $15 million. All of the IAS 38 criteria have been met for the recognition of $10 million of the development costs of an asset. Determine how costs will be capitalized and expensed under IFRS and GAAP Select one: a. GAAP : $10mn expensed as R&D. IFRS : $10mn capitalized as Deferred development cost b. GAAP : $10mn capitalized as R&D. IFRS : $10mn capitalized as Deferred development cost c. GAAP : $10mn capitalized as R&D. IFRS : $10mn expensed as Deferred development cost d. GAAP : $10mn capitalized as R&D. IFRS : $10mn capitalized as Deferred development cost

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 18RE

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