Randolph Ltd incurred research and development costs of 810,000 evenly reg T April 2021 to the...

  

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Randolph Ltd incurred research and development costs of €810,000 evenly reg T April 2021 to the financial year end 31 December 2021. The research phase lie three months to 1 July 2021 at which point the development phase began. On September 2021 it was confirmed that the project was commercially viable. IAS 38, Intangible Assets prescribes the accounting treatment for research and development costs. Distinguish between research and development costs, explain the accounting treatment of both and advise on the accounting treatment for the above item. Randolph Ltd recorded profit after tax for the year ended 31 December 2021 of €1212 million and the financial statements are due to be approved on 4 May 2022. During February 2022 torrential rain caused flooding in one of the company's warehouses which resulted in significant damage to the company's inventory. It is estimated that €8.2 million worth of inventory was damaged. It is estimated that the insurance would cover 75% of the value of the damaged inventory. IAS 10, Events after the Reporting Period, outlines the impact of events after the reporting date on financial statements. Distinguish between the two types of items covered under IAS 10 and explain the impact of both types of events on the financial statements. Advice Randolph of the accounting treatment of the damaged inventory in the financial statements for the year ended 31 December 2021. Randolph Ltd incurred research and development costs of €810,000 evenly reg T April 2021 to the financial year end 31 December 2021. The research phase lie three months to 1 July 2021 at which point the development phase began. On September 2021 it was confirmed that the project was commercially viable. IAS 38, Intangible Assets prescribes the accounting treatment for research and development costs. Distinguish between research and development costs, explain the accounting treatment of both and advise on the accounting treatment for the above item. Randolph Ltd recorded profit after tax for the year ended 31 December 2021 of €1212 million and the financial statements are due to be approved on 4 May 2022. During February 2022 torrential rain caused flooding in one of the company's warehouses which resulted in significant damage to the company's inventory. It is estimated that €8.2 million worth of inventory was damaged. It is estimated that the insurance would cover 75% of the value of the damaged inventory. IAS 10, Events after the Reporting Period, outlines the impact of events after the reporting date on financial statements. Distinguish between the two types of items covered under IAS 10 and explain the impact of both types of events on the financial statements. Advice Randolph of the accounting treatment of the damaged inventory in the financial statements for the year ended 31 December 2021.

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1 THE QUESTION IS BASED ON Ind AS 38 INTANGIBLE ASSETS IT PRESCRIBES DIFFERENT ACCOUNTING TREATMENT ... View the full answer