Question

A computer company has $3,000,000 in research and development costs. Before accounting for these costs, the net income of the company is $2,400,000. What is the amount of net income or loss after these R & D costs are accounted for?

Answer 1

Answer:

($600,000)

A loss of $600,000

Explanation:

The research and development costs will be accounted for as an expense in line with IAS 23 Borrowing cost under IFRS. As such, this will be deducted from the net income to properly account for it like every other expense that must have been initially deducted from sales.

Amount of net income or (loss) after these R & D costs are accounted for

= $2,400,000 - $3,000,000

= ($600,000)