Betty owns all 200 shares of Bronco Corporation stock valued at $50,000. John, a new shareholder, receives 200 newly issued shares from Bronco Corporation in exchange for inventory with an adjusted basis of $40,000 and an FMV of $50,000.

Which of the following statements is correct?

No gain will be recognized by John

The transaction results in $10,000 of ordinary income for John.

The transaction results in $10,000 of capital gain for John

John may defer the recognition of any tax until the stock is sold

Under US GAAP, R&D costs within the scope of ASC 730 are expensed as incurred. Under IFRS (IAS 382), research costs are expensed, like US GAAP. However, unlike US GAAP, IFRS has broad-based guidance that requires companies to capitalize on development expenditures, including internal costs, when specific criteria are met. Based on these criteria, internally developed intangible assets (e.g., development expenses related to a prototype in the automotive industry) are generally capitalized and amortized under IFRS and expensed under US GAAP.

Suppose you are the CFO of a pharmaceutical company. Your company invests millions of dollars in medicine-related research every year. As a CFO, you have enormous pressure from shareholders to boost your company's net income. If you can select complying with IFRS or US GAAP, which regulation do you want to choose? and explain the reason for your selection.