Part 2

Accounting policies

At a meeting on 16 June 2019, the directors of Swan Ltd decided to change the companys accounting policy in regard to research and development expenditure. In previous years, research and development expenditure had been capitalized and amortized over 3 years. In line with this policy, $75 000 was capitalized on 1 January 2018. The new policy is to write off all research and development to expense when incurred. During the year ended 30 June 2019, the company spent a further $62 000 on research and development which was capitalized on 1 January 2019. Research and development expenditure is allowable as a deduction for tax purposes when incurred.

Required

Prepare any note disclosures required by AASB 108/IAS 8 in respect of the change in accounting policy. Show all workings.