- This topic has 1 reply, 2 voices, and was last updated 4 months ago by
.
- Posts
Problem 1 APM sep/dec 2019
https://www.chinaacc.com/zcms/contentcore/resource/download?ID=355139
Part b require: the calculation of economic value added (EVA™), which gives the following information about R&D: “Research and development expenditure of $705m was incurred in the period leading to an economic asset of $4,233m at the year end.”
I want to ask in case of “expression” of the marker of the exam, “R &D expenditure”mean that the R&D expenditure that have not been capitalized at the begining of the year?
I see that in the sample answer, R&D expenditure was added back to calculate the openning net assets, this may mean that R&D expenditure have not been capitalized.The normal assumption in EVA questions is that for the financial statements R&D expenditure is written off as incurred (though development expenditure can be capitalised if certain tests are passed).
So, for the CE in EVA calculations some historical R&D needs to be added back to obtain opening CE.
- You must be logged in to reply to this topic.