Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes that it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells one of its patents. The history of Fields patent number 758-6002-1A is as follows.

Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2019, it revised its useful life estimate downward to five remaining years. The company?s year ends December 31. Fields follows IFRS for r eporting purposes.

Instructions

Calculate the carrying value of patent No. 758-6002-1A on each of the following dates:

a. December 31, 2014

b. December 31, 2018

c. December 31, 2021

d. How would your answers to parts (a) to (c) differ if ASPE were followed?

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Activity Date Cost 2011 – 2012 Research conducted to develop precipitator Design and construction of a prototype Testing of models Fees paid to engineers and lawyers to prepare patent application; patent granted January 4, 2014 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage Legal fees paid to successfully defend precipitator patent Research aimed at modifying the design of the patented precipitator Legal fees paid in unsuccessful patent infringement suit against a competitor $384,000 Jan. 3, 2013 Mar. 15, 2013 87,600 42,000 Jan. 4, 2014 59,500 Nov. 30, 2015 81,500 Dec. 31, 2016 42,000 Apr. 15, 2017 43,000 July 31, 2021 34,000