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.

At least 350 words

Answer 1

Answer:

Explaining the Accounting treatment of purchased technology.

In the event of technology, there is requirement for recognizing created technology and in process or continuous innovative work keeping in mind the end goal to do that there is requirement for assurance of the specialized plausibility, which is accomplished or not?, if accomplished , the technology is viewed as created and promoted at its reasonable esteem and it will be amortized over the helpful 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, however it is not at all like the created technology , in process R&D has uncertain helpful life and requirement for testing disability every year, if R&D is fruitful then the treatment would be as that of the created technology yet in the event that it is deserted ,at that point need to cost the whole adjust quickly.