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Hello Sir, I would like to know how to recognise sale (product) in the test phase?(prototype)-recognise as sale or deduct/offsetting from the research expense incurred?allowable under Conceptual Framework for offsetting?
Thank you.
I’m afraid I do not understand any of this question please could you phrase it more clearly
I mean that the product produce in the prototype or test phase,how should we account for the revenue of the sale of that product? Should we deduct the expense (offsetting ) or account as revenue or other income?
I would have gone for other income – I did see an argument somewhere about netting it off the costs but I can’t remember where.
If you are interested PWC have produced an in-depth guide where you may find guidance
https://www.pwc.com/gx/en/pharma-life-sciences/pdf/ifrs-inter-vols_1-2.pdf
As always keep it simple in the exam!
I would like to continue this thread.
in case of development phase if we earn some revenue from sale of sample product, for capitalizing development cost do we need to net that income?
assume capitalisation criteria met
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