ASU, Inc., a U.S. company, was acquired by an international company and ASU has a transition date of January 1, 2021 for first-time adoption of IFRS. ASU has a new cookie brand that is ready to be marketed but the company has not yet received copyright approval for the brand's logo. All costs for development of the copyright were expensed prior to IFRS January 1, 2021. ASU and its new international parent both have December 31 year-end accounting years. What should ASU do to prepare financial statements for the first time in accordance with IFRS?

Question

Quizplus · Accepted Answer

Under IFRS, development costs can be capitalized if certain criteria are met. Since the costs were expensed prior to the transition date, ASU can recognize the copyright as an asset by debiting copyright and crediting stockholders' equity at the transition date, January 1, 2021.

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