Question :
Janson Pharmaceuticals incurred the subsequent costs in 2013 related to a new cancer drug:
Research for new formulas $ 2,425,000
Development of a new formula 1,600,000
Filing and Legal fees for a patent for the new formula 60,000
Total $ 4,085,000
The development costs were incurred after commercial and technological feasibility was established and after the future economic benefits were deemed probable. The project was productively completed and the new drug was patented before the end of the 2013 fiscal year.
1. Determine the amount of research and development expense Janson could report in its 2013 income statement related to this project.
2. Determine the amount of research and development expense Janson could report in its 2013 income statement related to this project. Suppose that Janson prepares its financial statements according to International Financial Reporting Standards.