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Eva

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › Eva

  • This topic has 3 replies, 2 voices, and was last updated 9 years ago by Ken Garrett.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • March 3, 2016 at 2:57 pm #303258
    seanog91
    Member
    • Topics: 83
    • Replies: 54
    • ☆☆

    Should product development costs get added back to EVA? To me, it should be as it is costs that are planning for the future of the company.

    March 3, 2016 at 6:18 pm #303294
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10607
    • ☆☆☆☆☆

    Certainly R&D are added back, so I would say that product developent costs come under that category.

    Have you found an exception to that?

    March 3, 2016 at 8:12 pm #303310
    seanog91
    Member
    • Topics: 83
    • Replies: 54
    • ☆☆

    In 2014

    https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/p5/exampapers/P5_2014_Dec_q.pdf

    https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/p5/exampapers/P5_2014%20_dec_Ans.pdf

    the production costs was not added back to the calculation. after pasting the link to the solution I realised that credit was giving if it was included but why would anyone leave it out?

    Could it be assumed that it was capitalised and therefore excluded?

    March 4, 2016 at 8:09 am #303377
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10607
    • ☆☆☆☆☆

    That is the only sensible answer. The IAS says that research should be written off and development capitalised (subject to certain tests).

    I’m glad the answer recognised ambiguity in the question.

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