4. ABC Ltd. expenses its software R&D costs immediately for tax purposes, arguing that all material research and development costs are incurred before technological feasibility is reached. What adjustment would be required if the analyst decided to capitalize ABC's software R&D and to amortize the intangible asset using the straight-line method over the expected life of software (approximately three years)? Assume that R&D spending occurs evenly throughout the year and that only half a year's amortization is taken on the latest year's spending, R&D outlays for 2006, 2007, 2008, 2009 and 2010 are $10.2, $11.5, $12.1, 14.5 and $13.2, respectively. Given R&D outlays for the years 2006 to 2010, estimate the R&D asset and amortization expenses at the end of the 2009 and 2010 fiscal years (06/30/09, 06/30/10). The change in reporting method will give rise to a Deferred Tax Liability. Given a marginal tax rate of 35%, record the adjustment required in the financial statements