Word count note: The maximum expectedword count is 3500 words excluding references, cover page, footnotes etc. The word count can be decided as per

ASSIGNMENT

Word count note: The maximum expectedword count is 3500 words excluding references, cover page, footnotes etc. The word count can be decided as per the marks allocated to each question.

Question 1

Services Ltd incurred research and development costs of $10 million on a project to develop product A in 2018. The research phase can be clearly distinguished from the development phase of the project. Total costs in the research phase are $6 million, and in the development phase total costs are $4 million. All of the IAS 38 criteria have been met for recognition of the development costs as an asset. Product A was brought onto the market in 2019 and is expected to be marketable for five years. Total sales of Product A are estimated at more than $100 million.

Required:

Explain the research and development expenditure related regulations of IAS and US GAAP.

Determine the impact research and development costs have on Services Ltd in 2018 and 2019 income under (1) IFRS and (2) U.S. GAAP.

Summarize the difference in income, total assets, and total shareholders equity related to Product A over its five-year life under the two different sets of accounting rules.

(20 marks)

Question 2: Critically discuss SIX causes of differences in accounting practices used in different countries*.

*Note: Choose 2 countries of your choice for this task and make use of academic references to write this question.

You must discuss, with relevant examples, how a particular factor contributes to or leads to a particular difference in accounting practices. (25 marks)

Question 3: Explain in detail the differences between IFRS and GAAP (after FASB issued ASU 2017-04 to simplify the accounting for goodwill impairment) regarding the following:

Assignment/allocation of goodwill. (i.e. The levels at which goodwill is assigned /allocated)

Impairment of goodwill and test(s) applied and its steps (i.e., Methods of determining impairment of goodwill)

How impairment loss is recognized and allocated. (i.e., impairment loss[charge] calculation and allocation) (25 marks)

Question 4

Select a publicly listed company from any stock exchange and conduct an in-depth analysis of its three primary financial statements: Income Statement, Balance Sheet, and Cash Flow Statement. Additionally, provide a brief discussion on the Statement of Changes in Equity and the Notes to the Financial Statements, highlighting their significance in financial reporting and decision-making. Ensure your analysis incorporates relevant international accounting standards and financial reporting principles. (30 Marks)