development

Examples of development in the following topics:

• Accounting for R&D Activity

  • Research and development costs no longer appear as intangible assets on the balance sheet, but as expenses on the income statement.
  • In the United States, a typical ratio of research and development for an industrial company is about 3.5% of revenues.
  • Prior to 1975, businesses often capitalized research and development costs as intangible assets when future benefits were expected from their incurrence.
  • Research and development costs thus no longer appear as intangible assets on the balance sheet.
  • Cycle of Research and Development, from "Research and Evaluation on Education in Science and Engineering (REESE), Program Solicitation NSF 09-601"

• What Is R&D?

  • In the U.S., a typical ratio of research and development for an industrial company is about 3.5% of revenues.
  • The term R&D or research and development refers to a specific group of activities within a business.
  • New product design and development is more often than not a crucial factor in the survival of a company.
  • In the U.S., a typical ratio of research and development for an industrial company is about 3.5% of revenues.
  • Thus, research and development costs no longer appear as intangible assets on the balance sheet.

• Analyzing Intangible Assets

  • Research and development (R&D) costs are not in and of themselves intangible assets.
  • R&D activities frequently result in the development of something that is patented or copyrighted (such as a new product, process, idea, formula, composition, or literary work).
  • Many businesses spend considerable sums of money on research and development to create new products or processes, improve present products, and discover new knowledge that may be valuable.

• Reporting R&D Cost

  • Development is the application of research findings to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems, or services, before the start of commercial production or use.
  • Summarize how to report research and development costs on the financials statements

• Depletion Base

  • The depletion base is the total cost of a natural resource and includes acquisition, exploration, development, and restoration costs.
  • It can include costs related to the acquisition of the asset, exploration, development and preparation of the asset for use, and performance of restoration work .

• Characteristics of Intangible Assets

  • An example would be Coca-Cola's drink formula which is a closely held trade secret that only a few employees know; this is an example of an internally developed intangible asset.
  • Goodwill is a type of intangible asset that is acquired and recorded due to a business acquisition or combination rather unlike other intangible assets, which may be internally developed by the company.
  • Research and development costs incurred during the internal development or self-creation of an intangible asset are not costs that can be capitalized.

• Franchises and Licenses

  • Franchises and licenses are intangible assets that legally entitle a business to sell a product or service developed by another entity.
  • A franchisor will develop the brand, produce goods and develop marketing campaigns for its products.

• Introduction to IFRS

  • The IASB has continued to develop standards calling the new standards the IFRS.
  • The project also intends consider the changes in the economic environment that have occurred in the two or more decades since the concepts were first developed.
  • In the absence of a Standard or an Interpretation that specifically applies to a transaction, management must use its judgment in developing and applying an accounting policy that results in information that is relevant and reliable.
  • A map of developing countries, without the least advanced countries and the failed countries.

• Special Considerations for Acquisition and Depletion of Natural Resources

  • On the balance sheet, we classify natural resources as a separate group among noncurrent assets under headings such as "timber stands" and "oil reserves. " Typically, we record natural resources at their cost of acquisition plus exploration and development costs; on the balance sheet, we report them at total cost less accumulated depletion.
  • The company incurred costs of $200,000 to develop the site, including the cost of running power lines and building roads.
  • Total cost subject to depletion is the net cost assignable to the natural resource, plus the exploration and development costs.
  • If there is an obligation to restore the land to a usable condition, the firm adds these estimated restoration costs to the costs to develop the site.
  • In the example where the land was purchased, the total costs of the mineral deposits equal the cost of the site ($650,000) (minus the residual value of land and $50,000) plus costs to develop the site ($300,000), or a total of $900,000.

• Reasons for a Conceptual Framework

  • The main reasons for developing an agreed conceptual framework are that it provides:
  • FASB's Conceptual Framework, a project begun in 1973 to develop a sound theoretical basis for the development of accounting standards in the United States.