I don't know how to answer these questions. Please include explanation. I only know the basics on intangible assets.
Cases 1. NewDrugs, Inc., an international corporation, has identified a list of expenditures it believes to be intangible assets. Which items would be recognized as assets under US GAAP? Which items would be capitalized under IFRS? a. Research on potential pharmaceutical formulas b. Development of new pharmaceutical formulas, after feasibility and business plans have been established c. Legal fees to patent the newly developed formula d. Customer list purchased from a competitor e. Patent purchased from a competitor f. Legal fees to defend the purchased patent g. Goodwill included in the purchase of OldDrugs, Inc. h. Internally developed customer list Answer 1. Items capitalized under US GAAP: (list appropriate letters among a-h) Items capitalized under IFRS: (list appropriate letters among a-h) 1 2. During 2007, a company began researching and developing a new product for market. By June 30, 2008, the company had determined the new product was technologically feasible and developed a business plan including identification of a ready market for the product, and a commitment of resources to ready the product for market. The company has tracked costs of the product as follows: Research and development, Jan-June 2008 Research and development, July-Dec 2008 Training costs Legal fees - patent Mass production Marketing launch 130,000 80,000 15,000 20,000 120,000 75,000 What amount will be included in intangible assets on the company's December 31, 2008 financial statements prepared in accordance with IFRS? What amount will be reported as intangible assets under US GAAP? Answer 2. IFRS Research and development, JanJune 2008 Research and development, JulyDec 2008 Training costs Legal fees - patent Mass production Marketing launch GAAP ? ? ? ? ? ? ? ? ? ? ? ? 2 3. At the end of its reporting year, SunnySide shows the following intangible assets on its books: $30,000 patents with estimated remaining useful life of 10 years, and $46,000 goodwill with an indefinite life. Before closing its books, the company evaluates its intangible assets and identifies a $10,000 impairment in patents and a $15,000 impairment in goodwill. For IFRS, SunnySide accounts for its intangible assets using the cost method. a. How will the impairment loss be reported for US GAAP and IFRS? b. At the end of the following year, SunnySide determines the company has recovered $6,000 of the patent impairment and $8,000 of the goodwill impairment. How will this be reported for US GAAP and IFRS? Answer 3. a. Answer the question (max 2 sentences). b. Explain (max 3 sentences). 3 4. During 2007, a company began researching and developing a new technology. By March 31, 2008, the company had determined the new product was technologically feasible. As of April 30, 2008, the company had developed a business plan including identification of a ready market for the product, and a commitment of resources to ready the product for market. After completion of the second prototype in June 2008, the product was considered ready for mass production and marketing. The company has tracked costs of the product as follows: Market research costs, 2007 Research costs, 2007 Research costs, Jan-Mar 2008 Legal fees - patent Development costs, Apr 2008 Management time to develop business plan Development cost - initial prototype Testing of initial prototype Cost of revisions and second prototype Legal fees to defend patent Mass production Marketing launch 30,000 100,000 50,000 25,000 20,000 15,000 500,000 150,000 75,000 30,000 200,000 120,000 What amount will be included in intangible assets on the company's December 31, 2008 financial statements prepared in accordance with IFRS? How much would be included in intangible assets under US GAAP? Answer 4. Market research costs, 2007 Research costs, 2007 Research costs, Jan-Mar 2008 Legal fees - patent Development costs, Apr 2008 Management time to develop business plan Development cost - initial prototype Testing of initial prototype Cost of revisions and second prototype Legal fees to defend patent Mass production Marketing launch Total IFRS Amount ? ? ? ? ? US GAAP Amount ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 4 5. Excerpts from the reconciliation of Nokia's 2006 IFRS financial statements to GAAP are provided below. Nokia 2006 Financial Statements - US GAAP Reconciliation Amortization and impairment of identifiable intangible assets acquired \"The net carrying amount of other intangible assets under US GAAP is EUR 447 million in 2006 (EUR 425 million in 2005) and consists of capitalized development costs of EUR 149 million (EUR 213 million in 2005) and acquired patents, trademarks and licenses of EUR 298 million (EUR 212 million in 2005). The Group does not have any indefinite lived intangible assets. Amortization expense under US GAAP of other intangible assets as of December 31, 2006, is expected to be as follows...\" Amortization of goodwill \"...Under IFRS, the Group recorded an impairment of goodwill of EUR 151 million related to Amber Networks in 2003 as the carrying amount of the cash-generating unit exceeded the recoverable amount of the unit. Under US GAAP, goodwill is allocated to \"reporting units\
