Aztec Laboratories
Aztec Laboratories
In my opinion, I think Aztec Laboratories should account the R & D contract as a patent.
Research and development costs are the costs incurred in a planned search for new knowledge and in translating such knowledge into new products or processes. Prior to 1975, businesses often capitalized research and development costs as intangible assets when future benefits were expected from their incurrence. Due to the difficulty of determining the costs applicable to future benefits, many companies expensed all such costs as incurred. Other companies capitalized those costs that related to proven products and expensed the rest as incurred. Research and development costs no longer appear as intangible assets on the balance sheet. The team applies the same line of reasoning to other costs associated with internally generated intangible assets, such as the internal costs of developing a patent. Immediate expensing is justified on the following grounds: the amount of costs applicable to the future cannot be measured with any high degree of precision, doubt exists as to whether any future benefits will be received, and even if benefits are expected, they cannot be measured.
According to the case, if the research is successful and a therapy is developed, Aztec will maintain all manufacturing rights to the therapy and will receive royalties on units sold. The advantages of patent is keeping others out of the market, restricting competitors. Aztec will revenue from licenses or sale and retain all manufacturing rights to the therapy. The disadvantages of parent are cost and liability. Gartside, Aztec’s vice president of research and development, states that total development costs are anticipated to exceed Tenneyson’s $27 million funding. Furthermore, Aztec may try to invalidate their patent if the price is right. The company is responsible for enforcing his own patents, so if Aztec wants to stop another from infringing the patent, they must do so at a
In my opinion, I think Aztec Laboratories should account the R & D contract as a patent.
Research and development costs are the costs incurred in a planned search for new knowledge and in translating such knowledge into new products or processes. Prior to 1975, businesses often capitalized research and development costs as intangible assets when future benefits were expected from their incurrence. Due to the difficulty of determining the costs applicable to future benefits, many companies expensed all such costs as incurred. Other companies capitalized those costs that related to proven products and expensed the rest as incurred. Research and development costs no longer appear as intangible assets on the balance sheet. The team applies the same line of reasoning to other costs associated with internally generated intangible assets, such as the internal costs of developing a patent. Immediate expensing is justified on the following grounds: the amount of costs applicable to the future cannot be measured with any high degree of precision, doubt exists as to whether any future benefits will be received, and even if benefits are expected, they cannot be measured.
According to the case, if the research is successful and a therapy is developed, Aztec will maintain all manufacturing rights to the therapy and will receive royalties on units sold. The advantages of patent is keeping others out of the market, restricting competitors. Aztec will revenue from licenses or sale and retain all manufacturing rights to the therapy. The disadvantages of parent are cost and liability. Gartside, Aztec’s vice president of research and development, states that total development costs are anticipated to exceed Tenneyson’s $27 million funding. Furthermore, Aztec may try to invalidate their patent if the price is right. The company is responsible for enforcing his own patents, so if Aztec wants to stop another from infringing the patent, they must do so at a