Sony,Inc.spent $1,000,000 of development cost for commercially feasible prototypes.If Sony follows IFRS not GAAP,then the $1,000,000 would:
A)be recorded as an asset.
B)be recorded as an expense.
C)be recorded as revenue.
D)not be recorded.

Question

Quizplus · Accepted Answer

IFRS require companies to capitalize costs of developing intangible assets,such as prototypes for making new products or tools.GAAP generally expense such development costs because of the uncertainty of their value.

Sony,IncSpent $1,000,000 of Development Cost for Commercially Feasible Prototypes