Bluebottle Co has incurred development expenditure of $4,500,000 and research expenditure of $1,000,000 in the year ended 31 December 2014.
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 & development would appear in the financial statements of Bluebottle for the year ended 31 December 2014?
SUGGESTED SOLUTIONS
| Research Expenditure | 1,000,000 |
| Amount to be amortised | 180,000 |
| Total to be charged in Income statement | 1,180,000 |
| Development Expenditure | 4,500,000 |
| Amount to be amortised | 180,000 |
| Development Expenditure to be capitalised in Financial position | 4,320,000 |
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