It's not unusual for one company to buy another company in order to obtain technology that...

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

Solutions

Expert Solution

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.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

It’s not unusual for one company to buy another company in order to obtain technology that...

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.

Company XYZ is a high technology company. It is planning on acquiring another company in the...

Company XYZ is a high technology company. It is planning on acquiring another company in the high technology sector. Company XYZ dose not have enough cash to acquire the company and is planning on financing the acquisition through a bond offering. Which of the following measures is company XYZ MOST LIKEY to use in its analysis of operating profits considering it is a high debt transaction? A. LONG-TERM DEBT TO CAPITAL B. EBITDA margin C.Net profit margin D.return on equity...

To analyze the financial statements of a publicly traded company COMPANY IS BEST BUY Obtain an...

To analyze the financial statements of a publicly traded company COMPANY IS BEST BUY Obtain an annual report from a publicly traded corporation that is interesting to you. Be sure the company’s financial statements include deferred taxes, postretirement benefits, dilutive securities, and share-based compensation. What kind of share-based compensation does the company have? What was compensation expense for the two most recent years? What are the key elements of this plan discussed in the footnotes? Please identify and describe other...

While going to the grocery store it's not unusual to find stray shopping carts littering the...

While going to the grocery store it's not unusual to find stray shopping carts littering the parking lot. Shoppers may think that a parking spot is open, only to find that it's actually being used by a shopping cart. It seems like a basic courtesy to others: you get a cart at the grocery store, you use it to get your groceries and bring them to your vehicle, and then you return it for others to use. And yet, it's...

Of the three regulated steps of the glycolysis pathway, one is unusual. Which step is unusual...

Of the three regulated steps of the glycolysis pathway, one is unusual. Which step is unusual as a regulated step, and what is unusual about it?

1 A company has two ways to obtain new products to buy an company patent or...

1 A company has two ways to obtain new products to buy an company patent or license or by their own new product development efforts? True or False? 2 The easiest way to segment consumer markets is by their psychographics.? True or False? 3 In pure competitionthe market consists of many buyers and sellers trading over a range of rather than a single market price? True or False? 4 Examples of convenience products are buying life insurance and donating to...

In order to move from one place to another in the cell fatty acids need to...

In order to move from one place to another in the cell fatty acids need to associate with lipid chaperones. Why are these chaperones required, and what is the name of this group of proteins that are responsible for this trafficking of fatty acids within the cell? What is the main distinguishing feature of these proteins that makes it possible for fatty acids to move within the cell?

Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order...

Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: Materials purchased on account, $591,670. Materials requisitioned, $497,000, of which $64,610 was for general factory use. Factory labor used, $609,420, of which $115,790 was indirect. Other costs incurred on account for factory overhead, $142,000; selling expenses, $218,920; and administrative expenses, $130,170. Prepaid expenses expired for factory overhead were $27,220; for selling...

Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order...

Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: Materials purchased on account, $820,330. Materials requisitioned, $689,080, of which $89,580 was for general factory use. Factory labor used, $844,940, of which $160,540 was indirect. Other costs incurred on account for factory overhead, $196,880; selling expenses, $303,520; and administrative expenses, $180,470. Prepaid expenses expired for factory overhead were $37,740; for selling...

Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order...

Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: Materials purchased on account, $738,430. Materials requisitioned, $620,280, of which $80,640 was for general factory use. Factory labor used, $760,580, of which $144,510 was indirect. Other costs incurred on account for factory overhead, $177,220; selling expenses, $273,220; and administrative expenses, $162,450. Prepaid expenses expired for factory overhead were $33,970; for selling...

Subjects