How does company attempt to overcome any potential damage

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Intangibles and impairment

AFT Pharmaceuticals is a New Zealand pharmaceuticals company, listed on the New Zealand Exchange. Its ticker symbol is AFT.

The annual report 2019 is showing on the web site which is from AFT Pharmaceuticals Annual Report 2019. Please search this company from the website.


Question a) How much research and development expenditure does AFT Pharmaceuticals report on the statement of comprehensive income, and how much development expenditure did it capitalise during the year ended 30 June 2019?

Question b) NZ IAS 38 requires all research expenditure to be expensed immediately. What is the rationale for this requirement?

Question c) Do you think that the expensing of R&D expenditure causes any damage to the company? Support your answer with relevant financial/non-financial figures.

Question d) How does the company attempt to overcome any potential damage created by the NZ IAS 38 requirement to expense research expenditure immediately?

Question e) Refer to accounting policy note 4(u) Impairment of non-financial assets. Write down an improved accounting policy note for this item.

Reference no: EM132607233


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