Part A GoodLife Bhd. (GL) is a pharmaceutical company. GL spends heavily on research and development...

 

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Part A GoodLife Bhd. (GL) is a pharmaceutical company. GL spends heavily on research and development costs each year. GL's policy is to capitalise development expenditure meeting the conditions of MFRS 138 Intangible Assets. The company's finance director has asked you to compute the amounts for research and development cost that are to be included in its financial statements for the year ended 31 December 2020. Below are the lists of projects and its development expenditure: Development expenditure Project Balance at Expenditure Balance at 31.12.2020 1.1.2020 During 2020 RM'000 RM'000 RM'000 3,600 400 4,000 300 300 800 800 400 400 Notes on the projects C It is not yet complete and development is proceeding. It continues to meet the criteria for capitalisation in MFRS 138. D It commenced in 2020 and was abandoned during the year ended 31 December 2020 when a competitor launched a superior product. E It is a new development project commenced in 2020. It meets the criteria for capitalisation in MFRS 138. F It commenced and completed during 2020. Sales revenue is expected to begin in 2020. Continued... SKD/NJ 4/11 BAC2634 FINANCIAL ACCOUNTING AND REPORTING II 26 NOVEMBER 2021 All projects are assumed to have indefinite life. CDEF b) Compute the amounts to be included in the income statement and in the Statement of Financial Position for Research and Development expenditure, for the year ended 31 December 2020. (3 marks) Part A GoodLife Bhd. (GL) is a pharmaceutical company. GL spends heavily on research and development costs each year. GL's policy is to capitalise development expenditure meeting the conditions of MFRS 138 Intangible Assets. The company's finance director has asked you to compute the amounts for research and development cost that are to be included in its financial statements for the year ended 31 December 2020. Below are the lists of projects and its development expenditure: Development expenditure Project Balance at Expenditure Balance at 31.12.2020 1.1.2020 During 2020 RM'000 RM'000 RM'000 3,600 400 4,000 300 300 800 800 400 400 Notes on the projects C It is not yet complete and development is proceeding. It continues to meet the criteria for capitalisation in MFRS 138. D It commenced in 2020 and was abandoned during the year ended 31 December 2020 when a competitor launched a superior product. E It is a new development project commenced in 2020. It meets the criteria for capitalisation in MFRS 138. F It commenced and completed during 2020. Sales revenue is expected to begin in 2020. Continued... SKD/NJ 4/11 BAC2634 FINANCIAL ACCOUNTING AND REPORTING II 26 NOVEMBER 2021 All projects are assumed to have indefinite life. CDEF b) Compute the amounts to be included in the income statement and in the Statement of Financial Position for Research and Development expenditure, for the year ended 31 December 2020. (3 marks)

Answer rating: 100% (QA)

As per MFRS 138 Intagible Assets the accounting for intangible assests that have been developed in h... View the full answer