Question Mark Ltd has an income tax rate of 30 per cent.The company makes it a practice to capitalise a portion of its research and development costs as a 'deferred asset' and to amortise them at 20 per cent per annum.The accountant has suggested to the financial controller that the policy of capitalising research and development should be discontinued because the economic benefit of the expenditure is not clearly determinable.The amount of research and development capitalised this year was $180 000.
-What effect would such policy change have on net profit after tax?

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The Answer of Question Mark Ltd has an income tax rate of 30 per cent.The company makes it a practice to capitalise a portion of its research and development costs as a 'deferred asset' and to amortise them at 20 per cent per annum.The accountant has suggested to the financial controller that the policy of capitalising research and development should be discontinued because the economic benefit of the expenditure is not clearly determinable.The amount of research and development capitalised this year was $180 000.
-What effect would such policy change have on net profit after tax?

Question Mark Ltd Has an Income Tax Rate of 30