Case study
A Company is at any time engaged in a number of research and development projects. Detail of one projects.
Actual expenditure (1 April to 31 March)
2012: $350 000
2013: $480 000
2014: $860 000
Budgeted revenue (1 April to 31 March)
2015: $160 000
Annual cash inflow 2016 - 2019 inclusive $200 000 each year.
All revenue and expenditure are deemed to be probable. On 1 April 2013, the project team announced that the project, as at 1 February 2013, successfully adhered to all the requirements needed to progress towards the development stage. A total of $35 000 previously expensed in the financial reporting period 31 March 2013 is deemed to have been development expenditure.
Accounting for the research and development project. Your advice should show the accounting treatment of the research and development project at the end of the current financial period and for future financial reporting periods.
