Communication and Leadership
Research and development costs
GeneTech Ltd a biological research company that is developing gene technology in the hope of finding a vaccine for skin cancer During the last financial year, GeneTech Ltd spent $1.2 million on research. The scientists involved in the Project believe they may he on the right track with the research, although many other companies are claiming the same thing and as yet no one has Patented a vaccine.
Required
In groups of three or four, discuss the Options under IAS 38/AASB 138 Intangible Assets for the accounting treatment of the $1.2 million. What impact will each of these options have on the company's profit?
Prepare a one-page letter to the managing director of GeneTech Ltd advising her of your preferred treatment for the research and development costs.
FINANCIAL ANALYSIS
Refer to the consolidated financial statements and their notes in the latest financial report of JB Hi-Fi Limited on its website, www.jbhifi.com.au, and answer the following questions.
1. Were any items of property, plant and equipment revalued by the entity during the current financial year? during previous years? If so, give details.
2. Were any items of property, plant and equipment derecognized during the year? If so, how has the entity disclosed any gains or losses made on derecognition of such assets? Provide details of any financial amounts involved.
3. From the latest statement of financial position (balance sheet), provide details of the types and amounts of assets regarded by JB Hi-Fi Limited as 'intangible'. What accounting treatment is adopted in accounting for the acquisition of goodwill?
4. Have there been any instances where the group's non-current assets were revalued upwards/ downwards'? if so, provide details.