If Merck, a pharmaceutical firm, makes expenditures to research new drugs, it must treat the expenditures as an expense. If it acquires a patent for a new drug from its creator, it must treat the expenditure as an asset. If it acquires another firm with in-process R&D, it must treat the portion of the purchased price allocated to the in-process R&D as an asset. Explain U.S. GAAP’s rationale for the different treatment of these expenditures.
Answer to relevant QuestionsWhat is the effect of capitalizing interest costs associated with self-constructed assets on reported income summed over all the periods of the life of a given self-constructed asset, from building through use until eventual ...On January 1, 2013, Luck Delivery Company acquired a new truck for $30,000. It estimated the truck to have a useful life of five years and no salvage value. The company closes its books annually on December 31. Indicate the ...Refer to the preceding question. How will the retailer treat this lease under the new/proposed rules?Describe the U.S. GAAP rationale for reducing pension expense for the return on pension investments.Exhibits 12.18 and 12.19 present selected information from the notes to the financial statements of Juicy-Juice, a U.S. based beverage company, regarding its pension and health care retirement plans.a. What is the likely ...
Post your question