Question
Pharmaceutical Research Discovery Ltd (PRDL) is a pharmaceutical company. The company has spent millions of dollars researching the Covid-19 virus, with the aim of developing
Pharmaceutical Research Discovery Ltd (PRDL) is a pharmaceutical company. The company has spent millions of dollars researching the Covid-19 virus, with the aim of developing a vaccine.
To date their research has failed, they have not been successful in creating a formula for a vaccine. The CEO Jia Huang has decided to cease any further research. A number of other pharmaceutical companies that are also involved in a race for a vaccine have approached PRDL, and expressed interest in buying the research knowledge PRDL has collected.
Jia Huang is not sure how to treat this research expenditure in the accounting records of the company.
Briefly explain how this research should be treated using the definition criteria under the Conceptual Framework.
Definition
Yes/No
Why
Is Definition Criteria met?
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Managerial Accounting Creating Value in a Dynamic Business Environment
Authors: Ronald Hilton, David Platt
12th edition
1259969517, 1260566390, 978-1260417043
