Alpha Industries has spent 5 billion over the last three years in developing a new drug labeled BJ13. The approval from governmental authorities is expected by the end of the month, at which time the drug will be available for sale. None of Alpha's competitors has a product similar to BJ13, and the medical community is anxiously awaiting availability of this drug. Although BJ13 promises to be a "wonder drug" with huge financial success, Alpha's income statements for the last few years have shown substantial losses and Alpha's balance sheet does not include product BJ13 among the assets of the business.

Instructions:

Explain why one of Alpha's seemingly most valuable assets apparently has been omitted from the balance sheet, and why Alpha's income statements for the past few years reported substantial losses. (20 points)