Question

It’s not unusual for one company to buy another company in order to obtain technology that the acquired company has developed or is in the process of developing.

Required:

Explain the accounting treatment of purchased technology.

Answer 1

It’s not unusual for one company to buy another company in order to obtain technology that the acquired company has developed or is in the process of developing.

Required:

Explain the accounting treatment of purchased technology.

Answer:-

In case of innovation, there is necessity for perceiving made innovation and in process or constant imaginative work remembering the ultimate objective to do that there is prerequisite for confirmation of the particular credibility, which is cultivated or not?, whenever achieved , the innovation is seen as made and advanced at its sensible regard and it will be amortized over the supportive life.

When coming to R&D, before the treatment is distinctive , that is expensing is done in the time of securing which is apportioned to the in procedure R&D. in any case, the new standard requires the capitalization of the reasonable estimation of the in procedure R&D, anyway it isn't at all like the made innovation , in process R&D has unverifiable accommodating life and prerequisite for testing handicap each year, on the off chance that R&D is productive, the treatment would be as that of the made innovation yet if it is betrayed ,by then need to cost the entire change rapidly.

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