What is the cost of an intangible asset on 30 June 2024?
Understand the Problem
The question is asking us to calculate the total cost of an intangible asset for Spring Dow Limited as of 30 June 2024. This requires adding the initial purchase price of the research, the subsequent research costs, and the development costs incurred up to the recognition date, which is 1 June 2024.
Answer
The total cost of the intangible asset is given by $P + R + D$.
Answer for screen readers
The total cost of the intangible asset for Spring Dow Limited as of 30 June 2024 is given by the formula:
$$ \text{Total Cost} = P + R + D $$
Steps to Solve
- Identify Initial Purchase Price
First, determine the initial purchase price of the research asset, referred to as $P$.
- Calculate Total Research Costs
Next, total the additional research costs that have been incurred after the initial purchase but before the recognition date, which is 1 June 2024. Let this total be represented as $R$.
- Determine Development Costs
Now, identify any development costs incurred leading up to the recognition date, which we will call $D$.
- Total Cost Calculation
Add all identified costs together to find the total cost of the intangible asset. The formula for this is:
$$ \text{Total Cost} = P + R + D $$
- Final Review
Double-check the values of $P$, $R$, and $D$ to ensure all figures are accurate and complete.
The total cost of the intangible asset for Spring Dow Limited as of 30 June 2024 is given by the formula:
$$ \text{Total Cost} = P + R + D $$
More Information
The total cost calculated here accounts for the complete investment made in the intangible asset up to the recognition date, which is essential for accurate financial reporting and compliance with accounting standards.
Tips
- Forgetting to include all relevant costs such as additional research or development expenses.
- Mixing up the dates and including costs incurred after the recognition date.
AI-generated content may contain errors. Please verify critical information
