Maltese Laboratories incurred the following research and developments costs related to its pharmaceutical business: Internal projects (salaries, supplies, overhead for R&D facilities) -$ 620,000Payment to acquire R&D from a third party related to a specific project -75,000Costs of an R&D project to be sold under contract to Libo Pharmacy, a third party- 82,000In-process R&D associated with the acquisition of Curatics, an independentresearch company. -148,000What amount should Maltese report as research and development expense in its income statement?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Maltese Laboratories incurred the following research and developments costs related to its pharmaceutical business:
Internal projects (salaries, supplies, overhead for R&D facilities) -$ 620,000
Payment to acquire R&D from a third party related to a specific project -75,000
Costs of an R&D project to be sold under contract to Libo Pharmacy, a third party- 82,000
In-process R&D associated with the acquisition of Curatics, an independent
research company. -148,000
What amount should Maltese report as research and development expense in its income statement?
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