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The following balances existed in the accounting records of Koppa Co, at 31 December 20X7.
Development costs capitalised, 1 January 20X7 180
Research and development expenditure for the year 162
In preparing the company’s statement of comprehensive income and statement of financial position at 31 December 20X7 the following further information is relevant.
(a)The $180,000 total for development costs as at 1 January 20X7 relates to two projects:
$’000
Project 836: completed project: 82
(balance being amortised over the period expected to benefit from it.
Amount to be amortised in 20X7: $20,000)
Project 910: in progress 92
180
(b) The research and development expenditure for the year is made up of:
$’000
Research expenditure 103
Development costs on Project 910 which continues to satisfy the
requirements in IAS 38 for capitalisation 59
162
1. according to IAS 38 Intangible assets, what amount should be charged in the statement of profit or loss and other comprehensive income for research and development costs for the year ended 31 December 20X7?
2. according to IAS 38 Intangible assets, what amount should be disclosed as an intangible asset in the statement of financial position for the year ended 31 December 20X7?I have read the answer, but i really dont know how to do this
I assume you have watched the lecture on IAS 38?
The research costs are not capitalised they all appear as an expense in the Statement of profit or loss.
The development costs are capitalised and therefore appear in the Statement of financial position net of any amortisation. They are amortised when finished, and you are told the amortisation for the year on project 836. The other project is not finished and so will not be amortised.
The amortisation for the year is an expense in the Statement of profit or loss.
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