Optimal Health Bhd (OHB) is in the process of formulating a vaccine to curb the spread...
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Optimal Health Bhd (OHB) is in the process of formulating a vaccine to curb the spread of COVID-19 starting from the beginning of year 2020. OHB will strictly comply to the requirements of The Ministry of Health (MoH) and the National Pharmaceutical Regulatory Agency (NPRA), to ensure that the vaccine approved to be registered and marketed in Malaysia is safe, of good quality and has optimum efficacy according to requirements set by the World Health Organisation (WHO). The vaccine should show a minimum level point estimate vaccine efficacy (VE) of 50% in clinical trials, although a point estimate of 70% is preferred. The vaccine should generate antibodies that can stay in a person's body for at least six (6) months. Currently, the research and development (R&D) process of OHB has reached the stage of VE of 50% in clinical trials, but the generate antibodies still could not scientifically be proved to stay in a person's body for at least six (6) months. However, OHB has a strong indication that the project will have a positive result in the next clinical test. To date, OHB has spent RMI.8 million this year, where 65% of it is under research costs. REQUIRED: (a) Discuss the accounting treatment for R&D process of Optimal Health Bhd according to MFRS 138 Intangible Assets. (3 Marks) (b) In your opinion, does Optimal Health Bhd has reached the economic viability point? Explain your answer and suggest the accounting treatment according to MFRS 138 Intangible Assets. (2 Marks) B. Optimal Health Bhd (OHB) is in the process of formulating a vaccine to curb the spread of COVID-19 starting from the beginning of year 2020. OHB will strictly comply to the requirements of The Ministry of Health (MoH) and the National Pharmaceutical Regulatory Agency (NPRA), to ensure that the vaccine approved to be registered and marketed in Malaysia is safe, of good quality and has optimum efficacy according to requirements set by the World Health Organisation (WHO). The vaccine should show a minimum level point estimate vaccine efficacy (VE) of 50% in clinical trials, although a point estimate of 70% is preferred. The vaccine should generate antibodies that can stay in a person's body for at least six (6) months. Currently, the research and development (R&D) process of OHB has reached the stage of VE of 50% in clinical trials, but the generate antibodies still could not scientifically be proved to stay in a person's body for at least six (6) months. However, OHB has a strong indication that the project will have a positive result in the next clinical test. To date, OHB has spent RMI.8 million this year, where 65% of it is under research costs. REQUIRED: (a) Discuss the accounting treatment for R&D process of Optimal Health Bhd according to MFRS 138 Intangible Assets. (3 Marks) (b) In your opinion, does Optimal Health Bhd has reached the economic viability point? Explain your answer and suggest the accounting treatment according to MFRS 138 Intangible Assets. (2 Marks) B.
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Solution is given below Question a Discuss the accounting treatment for RD process of Optimal Health Bhd according to MFRS 138 Intangible Assets Answer As per the question OHB will strictly comply to ... View the full answer
Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
Posted Date:
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