SolvGen entered into a five-year research and development agreement with Careway Pharma Inc. (Careway) on January 1, 2010. The research and development agreement calls for SolvGen to use its best efforts to further develop proprietary instrument systems that have been under development for nearly 18 months and are expected to be ready for commercial launch in the near future. In connection with executing the research and development arrangement, SolvGen and Careway also entered into a five-year license and distribution agreement dated January 1, 2010. Under the terms of the research and development agreement, SolvGen retains all intellectual rights to the results of the research and development agreement (even in the event of default by the Company). In connection with this agreement, SolvGen is entitled to the following nonrefundable milestone payments from Careway: 1.
useful life. Instructor Explanation: Chapter 12 Points Received: 5 of 5 Comments: Question 2. Question : (TCO C) Wriglee, Inc. went to court this year and successfully defended its patent from infringement by a competitor. The cost of this defense should be charged to Student Answer: patents, and amortized over the legal life of the patent. legal fees, and amortized over 5 years or less.
Case 9.3 Facts: - DeviceCo and Pharmador form a joint venture (LeaseMed) - LeaseMed plans to lease an equipment from manufacturer unrelated to DeviceCo and Pharmador - Board approval is necessary for ongoing business activities (over $50,000) - LeaseMed created with initial cash contribution of $55,000 by DeviceCo and $45,000 by Pharmador. - Loses and profits divided 55:45 accordingly - Board of director - 3 members from each DeviceCo and Pharmador - Financing $550,000 from DeviceCo and $450,000 from Pharmador, no investment grade debt - All equity meets the definition of "equity at risk" - Expected losses exceed $ 1 million 1. Can either venture qualify for business scope exception, which would exempt the investors from remaining provisions
* Milestone payment revenue should then be spread out on a pro rata basis as products are distributed under the license and distribution agreement. Differences under IFRS? * Since the agreement has just one deliverable, and the agreements went into effect at the same, no material difference exists when comparing GAAP and IFRS. * However, under IFRS, one could record revenue up-front, mainly from the milestone
To the extent that the liability exceeds the amount previously recognized in equity, the excess is recognized as compensation cost. The total recognized compensation cost for an award with a contingent cash settlement feature shall at least equal the fair value of the award at the grant
As for the balance sheet, it shows the assets, liabilities, and stockholder’s equity for a specified date. The balance sheet reflects the organization’s financial position. The total assets within the balance sheet must equal the total liabilities and stockholder equity. The statement of cash flow states the cash inflows as well as outflows from the operating, financing, and investing transactions during a specific period. It reports the organization’s beginning and ending cash, investing and financing
PART A (the report) SOLE PROPRIETORSHIP: This is the most common form of doing business within the United States. In this type of business there is one owner and no separation exists between he owner and the business. As owner, you are entitled to all profits, and you are responsible for all losses and liabilities incurred by the business. Having full freedom to act as you will is a strong advantage to forming this type of business. Liability: As mentioned above, in a sole proprietorship the owner is held accountable for any liabilities attributed to the business.
The first statement is the income statement. An income statement documents the income for a period of time. External users, such as investors and creditors utilize income statements as an indication of future performance-based on past income when deciding whether to invest in a company or the probability of loan repayment. Internal users, such as managers and owners may use the net income to verify sales goals or justify bonus payment. When preparing the income statement, the first entry is revenue.