Question: HeeHaw Ltd is currently conducting research and development activities for a new product. During the financial year, the entity incurred research and development costs

HeeHaw Ltd is currently conducting research and development activities for a new product. During the financial year, the entity incurred research and development costs amounting to $82 million. Of this total cost, 60% relates to research, while the balance relates to development. One-fourth of the amount recognised as development cost was incurred between July 1, 2021 to September 30, 2021. The product achieved technical, financial and commercial feasibility as at October 1, 2021. Similar intangible assets are amortised over ten years. Required: Calculate the amount that would be capitalised as development cost. Prepare the relevant financial statement extracts for the year ending December 31, 2021.

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