Question
Builders Supplies Ltd has undertaken a project to develop an online sales team. The project involves all sales representatives being equipped with: Computers that are
Builders Supplies Ltd has undertaken a project to develop an online sales team. The project involves all sales representatives being equipped with:
- Computers that are linked to the companys inventory records for paperless placing and confirming of orders; and
- Hologram-projecting equipment which can project an accurate, detailed three-dimensional image of every stock item at the premises of customers.
The costs incurred in the current period (2017) on this project were:
computer equipment (life five years, zero residual value) $ 1,000,000
software development 380,000
consultants fees (for implementation and testing) 620,000
The project has been successfully generated and is now in the process of being implemented. The project has a go-live date of 1 August 2017. Builders Supplies Ltd is hoping to sell the technology to other companies.
Required:
For the reporting period ended 30 June 2017, applying the provisions of AASB 138:
- Identify the amount of research recognised as an expense;
- Identify the amount of development recognised as an expense; and
- Identify the amount of development capitalised.
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