• What does the value of goodwill on Microsoft Balance Sheet capture and state the primary cause of the increase in the value of goodwill on the SFP from 2020 to 2021? (up to 200 words)

• Complete the following table relating to R&D expenses reported by Microsoft for 2021 – 2019 and comment on whether Microsoft appears to be maintaining, increasing or decreasing its investment in R&D activity over this period:
  • R&D expense
  • R&D expense/Revenue
  • R&D expense/Operating expenses

2.2 In following the US GAAP, Microsoft Balance Sheet does not include an intangible asset for the value created by internally generated R&D costs.
Under US GAAP, both research costs and development costs are expensed is incurred, making the recognition of internally generated intangible assets
rare. Under IFRS costs associated with the creation of intangible assets can be capitalized if certain criteria are met. In your opinion, which accounting
principle (IFRS or US GAAP) provides financial statements that better reflect costs and benefits of periodic R&D spending?

Answer rating: 100% (QA)

1 Microsofts Balance Sheet shows a rise in the value of goodwill for the company This is because the business has a lot of intangible assets like pate... View the full answer