The following costs are incurred during the research and development phases of a laser bone scanner:
Laboratory research aimed at discovery of new knowledge: $600,000
Search for application of new research finding: 400,000
Salaries of research staff designing new laser bone scanner: 1,200,000
Material, labor and overhead costs of prototype laser scanner: 850,000
Costs of testing prototype and design modifications: 450,000
Engineering costs incurred to advance the laser scanner to full production stage (technological feasibility reached): 700,000
Identify which of these are research phase items and will be immediately expensed under U.S. GAAP and IFRS.
A) $4,200,000 (U.S. GAAP); $3,500,000 (IFRS)
B) $1,000,000 (U.S. GAAP); $1,000,000 (IFRS)
C) $2,200,000 (U.S. GAAP); $1,200,000 (IFRS)
D) $4,200,000 (U.S. GAAP); $4,200,000 (IFRS)