Under U.S. GAAP, research and development costs are expensed as incurred; however, in the natural resources industry, the cost of finding and developing natural resources (such as crude oil reserves) may be capitalized in the balance sheet under the full cost and successful efforts methods. Are these methods inconsistent with the general treatment of research and development costs under U.S. GAAP? What explanations can you offer for this inconsistency in accounting treatment of similar outlays under U.S. GAAP?
Under U.S. GAAP, research and development costs are expensed as incurred; however, in the natural resources...
Under U.S. GAAP, research and development costs are expensed as incurred; however, in the natural resources industry, the cost of finding and developing natural resources (such as crude oil reserves) may be capitalized in the balance sheet under the full cost and successful efforts methods. Are these methods inconsistent with the general treatment of research and development costs under U.S. GAAP? What explanations can you offer for this inconsistency in accounting treatment of similar outlays under U.S. GAAP?
Under U.S. GAAP, research and development costs are expensed as incurred; however, in the natural resources industry, the cost of finding and developing natural resources (such as crude oil reserves) may be capitalized in the balance sheet under the full cost and successful efforts methods. Are these methods inconsistent with the general treatment of research and development costs under U.S. GAAP? What explanations can you offer for this inconsistency in accounting treatment of similar outlays under U.S. GAAP?
Under U.S. GAAP, which of the following statements is MOST accurate? Research and development costs are not expensed. Purchased patent and copyright costs are not expensed. Goodwill cannot be recognized and capitalized in a purchase transaction.
Which of the following is true of accounting for research and development cost? Under U.S. GAAP accounting for research and development costs violates the conservative principle. OR The current accounting for research and development costs under U.S. GAAP avoids the probability of companies to manipulate their earnings.
Do you think the fact that most costs under U.S. GAAP have to be expensed instead of capitalized places U.S. companies at a disadvantage?
in millions of euros Research and development expenditures of which: Development costs capitalized from annual income statements: Pretax profit under IFRS from yearend balance sheets: Total assets under IFRS from annual statements of cash flow: Operating cash flow under IFRS Year 1 Year 2 Year 3 2,500 3,000 3,600 1,000 1,240 1,300 .400 9,800 9,500 78,000 80,000 84,000 5,000 5,300 4,800 As a starting point, you have reviewed descriptions of Remy's R&D activities and concluded that all R&D expenditures would...
Which of the following is the least likely treatment of an asset under U.S. GAAP? Group of answer choices a. The carrying value of an asset is recorded as $18,000 when the value of future cash flows from the asset is $19,000. b. A cost of $100,000 incurred in the development of software to improve the operating efficiency is capitalized. c. A loss of $100 is recognized when the fair value of the equipment falls from $250 to $150.
5. Indicate whether each of the following costs would be expensed (E) or capitalized (C) under full cost (FC) and successful efforts (SE) accounting. Cost SE FC a. Aerial magnetic study—an area of interest is identified b. Seismic studies on 20,000 acres-no land is leased c. Brokers' fees d. Bottom-hole contribution: Well is productive. Well is dry. e. Dry-hole contribution f. Delay rental payment g. Cost of landmen in acquiring properties h. G&G to select specific drillsite i. Cash bonus...
Indicate whether each of the following describes an accounting treatment that is acceptable under IFRS, U.S. GAAP, both, or neither. A company takes out a loan to finance the construction of a building that will be used by the company. The interest on the loan is capitalized as part of the cost of the building. Inventory is reported on the balance sheet using the last-in, first-out (LIFO) cost flow assumption. ,The gain on a sale and leaseback transaction classified as...
During 2017, Campbell Manufacturing Company incurred $62,400,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in 2017. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $62 per unit. Packaging, shipping, and sales commissions are expected to be $9 per unit. Campbell expects to sell 1,300,000 batteries before new research renders the battery design technologically obsolete....