Sbr (int/UK) Strategic Business Reporting

  

(1 mark) 

The costs of adapting each piece of equipment of $50,000 are should be recognised 

as inventories, in accordance with IAS 2 Inventories. 

(1 mark) 

When each piece of equipment is sold then the inventory should be derecognised 

and the cost of $50,000 included in cost of sales. 

(1 mark) 

The legal action may be an indicator of impairment. Per IAS 36 Impairment of Assets, 

an impairment review should be performed in respect of the development asset. 

  

(1 mark) 

If the legal action results in the discontinuation of the product then any finished 

goods or work-in-progress may need writing down.