Question

Should there be a new accounting standard specific to the pharmaceutical industry (in IAS or AASB)...

Should there be a new accounting standard specific to the pharmaceutical industry (in IAS or AASB) to resolve the discrepancies in identifying R&D effectively?

and why?

Homework Answers

Answer #1

ANSWER.

NO NEED FOR A NEW ACCOUNTING STANDARD SPECIFIC TO THE PHARMACEUTICAL INDUSTRY .

REASONS :

IFRS CLEARLY GIVE DIRECTIONS FOR TREATMENT OF R & D COSTS FOR PHARMACEUTICAL COPMPANIES.

R& D EXPENSES INCURRED IN RESEARCH PHASE SHOULD BE EXPENSED AS AND WHEN INCURED AND THOSE INCURRED DURING DEVELOPMENT PHASE SHOULD BE CAPITALISED ON MEETING THE CRITERIA SET FORTH.

IF ANY R&D EXPENSES ARE NOT POSSIBLE TO CLASSIFY AS ABOVE , THEN THEY SHOULD BE TREATED AS INCURRED ON RESEARCH PHASE AND CHARGED TO PROFIT AND LOSS ACCOUNT.

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