A company incurs research and development costs of $200,000 in 2013 of which $50,000 of these costs relate to development activities because certain criteria have been met which suggest that an intangible asset has been created.
As a result of research and development costs, what is the difference in income between reporting using U.S. GAAP and IFRS in 2013?

Question

Quizplus · Accepted Answer

GAAP [R&D Costs are Expensed as Incurred $200,000] - [R&D Costs $200,000 - IFRS R&D Capitalizable as Asset $50,000 = R&D Costs Expensed $150,000] = $50,000 Lower Income under GAAP

A Company Incurs Research and Development Costs of $200,000 in 2013