The Thomas Company is in the process of developing arevolutionary new product. A new division of the company was formedto develop, manufacture, and market this product. As of the end ofthe year December 31, 2010, the product has not been manufacturedfor resale; however, the prototype unit was built and is inoperation. Throughout 2010, the division incurred certain costsincluding design and engineering studies, prototype manufacturingcosts, administration expenses (including salaries ofadministrative personnel), and market research costs. In addition,$500,000 in equipment (estimated useful life of 10 years) waspurchased for use in developing and manufacturing the preproductionprototype and will be used to manufacture the product.Approximately $200,000 of this equipment was built specifically forthe design and development of the product; the remaining $300,000of equipment will be used to manufacture a product once it is incommercial production.
Required: In the U.S. (SFAS No. 2), developmentcosts are expensed but under the IFRS (IAS 38), many developmentcosts are capitalized. Judge and support which treatment adheresbest to the matching principle, basic to the conceptual frameworksof both U.S. GAAP and IFRS.
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."
