Question: answer please A division manager has concerns about the commercial potential of a software product for which development costs are currently being capitalized as an

 answer please A division manager has concerns about the commercial potential

answer please

A division manager has concerns about the commercial potential of a software product for which development costs are currently being capitalized as an asset rather than being shown as an expense for internal reporting purposes. The manager's bonus is based, in part, on division profits. The manager argues that showing development costs as an asset is justified because the new product will generate profits but presents little evidence to support his argument. The last two products from this division have been unsuccessful. The management accountant disagrees but wants to avoid a difficult personal confrontation with the boss, the division manager Identify any potential ethical conflict in the given scenario and suggest the management accountant regarding his possible courses of action according to the IMA Statement of Ethical Professional Practice. [2.5]

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