Jackson Plc Is Developing Computer Software for Use in Its

question 39

Multiple Choice

Jackson Plc is developing computer software for use in its courier delivery service business.So far the company had spent £50 000 but the software is still unfinished and not expected to be finished in time for the preparation of the reports.As a result,the company had to purchase a computer package amounting to £100 000 to finalise its accounts.There is no further use for the unfinished software as it is expected that the purchased computer package could be used by the entity for another 10 years.Which accounting treatment would be consistent with the Conceptual Framework?

• A)recognise an asset of £150 000
• B)recognise an expense of £150 000
• C)recognise an asset of £100 000 and expense of £50 000
• D)recognise an asset of £50 000 and expense of £100 000

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Definitions:

Fair Value

Fair value is the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Non-Controlling Interest

The portion of equity in a subsidiary not attributable, directly or indirectly, to the parent company.

Price Per Share

The amount of money that buying one share of a company's stock will cost.

Social Media Users

Individuals who use online platforms and websites to create, share, or exchange information, ideas, pictures/videos, and develop social networks.