Acct 712 James De La Torre Professor Neal B. Hitzig Case 09-2 Pharmagen 1. Since there is no obligation to the nonrefundable repayment of the $500 million of funding and Pharma retains intellectual rights (no financial risk for Pharma as per ASC 730-20-25-4)‚ it can be seen as a Research and Development and expensed as incurred according to ASC 730-20-35-1 because no future service can be made. The funding for product X is specified by the investor to be used only for R&D of
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Case 09-2 Issue: Decide how to account for the funding of the R&D and royalty payments. Identify the authoritative literature applicable to this funding arrangement and discuss the appropriate accounting for the agreement in accordance with that guidance. Facts: Pharmagen is a pharmaceutical company Company XYZ is an unrelated third-party private equity investor with no prior relationship or business operations related to Pharmagen Pharmagen and Company XYZ have entered into a funding agreement
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Trueblood Case 9-2: Pharmagen 1. State the issue at hand. (Typically this is merely the question you are asked at the end of the case.) How to account for the funding of the R&D and royalty payments 2. State the fact pattern. BRIEFLY present the relevant facts. (Bullet points can be very useful here.) (This can be a challenge‚ given that some Trueblood cases are only a few paragraphs long‚ it can be hard to further summarize them.) • Pharmagen entered into a funding agreement with Company XYZ
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In this situation I would argue that ASC 730-20 is applicable. Pharmagen is entering into an agreement with PEI (investors) on a contractual basis to provide services and an option to acquire the results of the R&D (FASB 68). Pharmagen retains all ownership rights to the development of X. It also states that in R&D arrangements the entity (in this case Pharmagen) usually has an option to either purchase the partnership’s interest (PEI) or to obtain the exclusive rights to the entire results in
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Case No. 2: Pharmagen Pharmaceutical Development Funding According to the Accounting Standards Codification‚ the funding arrangement between Pharmagen (Pharma) and the private equity investor (PEI) would be applicable under the Research and Development Arrangements standard (ASC 730-20). This standard provides guidance for entities that are entered into a research and development (R&D) arrangement who acquire the results of research and development through the entire or partial funding by others
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PSAK No.9 PENYAJIAN AKTIVA LANCAR DAN KEWAJIBAN JANGKA PENDEK Pernyataan Standar Akuntansi Keuangan (PSAK) No. 9 PENYAJIAN AKTIVA LANCAR DAN KEWAJIBAN JANGKA PENDEK Pernyataan Standar Akuntansi Keuangan (PSAK) No. 9 tentang Penyajian Aktiva Lancar dan Kewajiban Jangka Pendek disetujui dalam Rapat Komite Prinsip Akuntansi Indonesia pada tanggal 24 Agustus 1994 dan telah disahkan oleh Pengurus Pusat Ikatan Akuntan Indonesia pada tanggal 7 September 1994. Pernyataan ini tidak wajib diterapkan untuk
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3‚ 20X1‚ and the price dropped to $15 in March and remained steady till Dec. 31‚ 20X1. OTT management does not believe the decline in price to be permanent and has asserted that it does not intend to sell this investment in the future. Investment 2 – Beary Beary OTT held notes of Beary Beary with an amortized cost of $95 and a fair value of $88 on Dec. 31‚ 20X1. OTT’s investment committee established a policy requiring the sale of this security when the fair value declines below $90. Investment
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MS-09 Management Programme ASSIGNMENT SECOND SEMESTER 2012 MS-09: MANAGERIAL ECONOMICS School of Management Studies INDIRA GANDHI NATIONAL OPEN UNIVERSITY MAIDAN GARHI‚ NEW DELHI – 110 068 ASSIGNMENT Course Code Course Title Assignment Code Coverage : : : : MS- 09 Managerial Economics MS - 09/TMA/SEM-II/2012 All Blocks Note: Answer all the questions and send them to the Coordinator of the Study Centre you are attached with. 1. “The relevance of Opportunity Costs is not
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DISCUSSIONS Week1-1 In your opinion‚ discuss whether the world of finance is too difficult for the average person to understand. * From the e-Activity‚ choose the reason that you believe had the greatest influence toward the 2007-09 financial crisis and explain why. The textbook addresses several issues as well. finance can be a complex subject‚ but whether it is too difficult to understand that is a different story. I believe in life that nothing can be to hard or too difficult to do‚ like
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09 Student: ___________________________________________________________________________ 1. A flexible budget is "flexible" in the sense that a budget can be prepared for any level of activity‚ but once a budget is set the budget figures are not changed if actual activity later proves to be different than budgeted activity. True False 2. In a performance report‚ actual costs should be compared to budgeted costs at the original budgeted activity level. True False 3. The overhead spending variance
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