1.
Concept Introduction:
Research and development costs: The costs that are in form of expenditures incurred in innovation and discovery of new products and processes. The research and development costs are expenses when incurred as it is difficult to predict future benefits from research and development costs.
The costs that are reported as research and development expenses on the income statement.
2.
Concept Introduction:
Research and development costs: The costs that are in form of expenditures incurred in innovation and discovery of new products and processes. The research and development costs are expenses when incurred as it is difficult to predict future benefits from research and development costs.
The costs that are capitalized and reported in the patent account on the
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FINANCIAL+MANAGERIAL ACCT W/CONNECT
- Costs that are capitalized with regard to a patent include a. Legal fees of obtaining the patent, incidental costs of obtaining the patent, and costs of successful patent infringement suits. b. Legal fees of obtaining the patent, incidental costs of obtaining the patent, and research and development costs incurred on the invention that is patented. c. Legal fees of obtaining the patent, costs of successful patent infringement suits, and research and development costs incurred on the invention that is patented. d. Incidental costs of obtaining the patent, costs of successful and unsuccessful patent infringement suits, and the value of any signed patent licensing agreement.arrow_forwardIndicate whether the following items are capitalized or expensed in the current year. a.Purchase cost of a patent from a competitor. b.Research costs. c.Development costs (after achieving economic viability). d.Organizational costs. e.Costs incurred internally to create goodwill.arrow_forwardWhich of the following groups would be classified as intangible assets for financial accounting andreporting purposes? a. long-term notes receivable, copyrights, goodwill, and trademarksb. patents, computer software costs, franchises, and trademarksc. computer software costs, research and development costs for internally developed patents,patents, and goodwilld. organization costs, goodwill, costs of employee training programs, and trademarksarrow_forward
- a. Over what period of time should the cost of a patent acquired by purchase be amortized?b. In general, what is the required accounting treatment for research and development costs?c. How should goodwill be amortized?arrow_forwardHow should research and development costs be accounted for, according to an IASB Statement? a. Must be capitalized when incurred and then amortized over their estimated useful lives. b. Must be expensed in the period incurred. c. May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved. d. Must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable.arrow_forward3. Indicate how items on the list below would generally be reported in the financial statements. Classification [6] [7] [8] [9] [10] [11] Item Cost of searching for applications of new research findings. Goodwill acquired in the purchase of a business. Cost of purchasing a patent from an inventor. Legal costs incurred in securing a patent. Cost of conceptual formulation of possible product alternatives. Cost of purchasing a trademark.arrow_forward
- Definition of the following in Accounting 1. Cost of Patent Inclusions 2. Impairment of Trademark 3. Franchise Costarrow_forwardWhich of the following intangible assets should be shown as a separate item on the balance sheet? a. Goodwill b. Franchise c. Patent d. Trademark Explaine each choicesarrow_forwardUnder IFRS a. research and development expenditures are expensed in the period incurred. b. research and development expenditures are capitalized and amortized. c. development expenditures that meet certain criteria are capitalized and amortized; research expenditures are expensed in the period incurred. d. research expenditures that meet certain criteria are capitalized and amortized; development expenditures are expensed in the period incurred.arrow_forward
- Current year’s depreciation charge relating to Equipment used for designing products should be included as an expense in the current year’s Statement of Comprehensive Income, within which of the headings stated below: Within other operating expenses, Within Distribution cost or Within Administrative expenses or Within Cost of sales.arrow_forwardCosts associated with various intangibles of a company may either be expensed when incurred or capitalized and amortized. Indicate how each of the following costs should be recorded. Options: - Charged to franchise account and amortized - Charged to patent account and amortized - Charged to appropriate asset accounts and amortized - Charged to expense when incurred 1. Initial fee to acquire a franchise 2. Design, construction, and testing of preproduction prototypes and models 3. Legal costs incurred in connection with a successful patent application 4. Laboratory research aimed at discovery of new knowledge 5. Cost of purchased equipment that will be used in a series of R&D projects over a ten-year period 6. Legal costs of the initial incorporation of a business 7. Cost of a long-term lease of land containing mineral deposits 8. Annual service fee paid to the franchiser's headquarters for administrative services rendered to the…arrow_forwardWhich of the following term relates to Copyrights, Patents and Trademarks? O a. Investments O b. Intangible assets O c. Current assets O d. Fixed assetsarrow_forward
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage