Bluebottle Co has incurred development expenditure of $4,000,000 and research expenditure of $2,000,000 . in the year ended 31 December X1. The development expenditure has been capitalised in accordance with IAS 38. Bluebottle Co's policy is to amortise capitalised development expenditure over 25 years.
What balances relating to research and development would appear in the financial statmens of Bluebottle for the year ended 31 December X1?(.e. statement of financial position and Income statement)
Working :
| income statement | $ |
| research expenses | 2,000,000 |
| Amortisation expenses | 160,000 |
| Total | 2,160,000 |
| financial Position | $ |
| Development expenditure | 4,000,000 |
| Less Provision for Amortisation Expenses | 160,000 |
| Total | 3,840,000 |
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