Moxie Corporation incurs research and development costs of $500,000 in 2009, 30 percent of which relates to development activities subsequent to certain criteria having been met that suggest that an intangible asset has been created. The newly developed product is brought to market in January 2010 and is expected to generate sales revenue for 10 years. LO4

a. Determine the amount Moxie should recognize as research and development expense in 2009 under (1) IFRS and (2) U.S. GAAP.

b. Determine the adjustments that Moxie would make in 2009 and 2010 to reconcile net income and stockholders’ equity under IFRS to a U.S. GAAP basis.