The application of AC 122 to research and development, in the pharmaceutical industry : conceptual issues and implementation concerns : a case study

Simple item page
dc.contributor.advisorEveringham, Geoffen_ZA
dc.contributor.authorde Waal, Margaret Suzanneen_ZA
dc.date.accessioned2016-03-07T04:13:12Z
dc.date.available2016-03-07T04:13:12Z
dc.date.issued1998en_ZA
dc.descriptionIncludes bibliographical references.en_ZA
dc.description.abstractResearch and development spending has become increasingly important over the last two decades. Despite this, the South African business community has largely ignored the South African accounting standard for research and development costs, AC 122, issued in 1994. A review of the comments received from a number of respondents to the exposure draft to AC 122 and it's international equivalent, lAS 9 (revised), suggests that the implementation difficulties associated with AC 122 are the major reason for the apparent lack of acceptance of AC 122 by the local accounting profession and industry. This research attempts to identify these implementation concerns, specifically in relation to the pharmaceutical industry, so as to provide guidance for implementing AC 122 in this industry. From an analysis performed of AC 122 and the responses of a number of members of the local and global business community, three main implementation problems associated with AC 122 were identified. These are (a) the appropriate allocation of R & D costs between research costs and development costs, (b) implementing the requirement to capitalise development costs, and (c) determining the most appropriate method and time period for amortising a development asset. The identification of these problems also highlighted that AC 122 is deficient in implementation guidance and requires the exercise of an unusually high level of subjective judgement. This study illustrates that it is possible to develop guidelines for overcoming the problems identified in the pharmaceutical industry. This research also provides an approach for similar research in other R & D intensive industries. However, the time and cost of performing such an exercise is likely to limit the industry approach to accounting for R & D costs. The research led to the conclusion that the accounting standard for research and development costs in South Africa is difficult to apply consistently in practice, and requires amendment if it is to obtain the support of the accountancy profession and commerce.en_ZA
dc.identifier.apacitationde Waal, M. S. (1998). <i>The application of AC 122 to research and development, in the pharmaceutical industry : conceptual issues and implementation concerns : a case study</i>. (Thesis). University of Cape Town ,Faculty of Commerce ,College of Accounting. Retrieved from http://hdl.handle.net/11427/17534en_ZA
dc.identifier.chicagocitationde Waal, Margaret Suzanne. <i>"The application of AC 122 to research and development, in the pharmaceutical industry : conceptual issues and implementation concerns : a case study."</i> Thesis., University of Cape Town ,Faculty of Commerce ,College of Accounting, 1998. http://hdl.handle.net/11427/17534en_ZA
dc.identifier.citationde Waal, M. 1998. The application of AC 122 to research and development, in the pharmaceutical industry : conceptual issues and implementation concerns : a case study. University of Cape Town.en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - de Waal, Margaret Suzanne AB - Research and development spending has become increasingly important over the last two decades. Despite this, the South African business community has largely ignored the South African accounting standard for research and development costs, AC 122, issued in 1994. A review of the comments received from a number of respondents to the exposure draft to AC 122 and it's international equivalent, lAS 9 (revised), suggests that the implementation difficulties associated with AC 122 are the major reason for the apparent lack of acceptance of AC 122 by the local accounting profession and industry. This research attempts to identify these implementation concerns, specifically in relation to the pharmaceutical industry, so as to provide guidance for implementing AC 122 in this industry. From an analysis performed of AC 122 and the responses of a number of members of the local and global business community, three main implementation problems associated with AC 122 were identified. These are (a) the appropriate allocation of R & D costs between research costs and development costs, (b) implementing the requirement to capitalise development costs, and (c) determining the most appropriate method and time period for amortising a development asset. The identification of these problems also highlighted that AC 122 is deficient in implementation guidance and requires the exercise of an unusually high level of subjective judgement. This study illustrates that it is possible to develop guidelines for overcoming the problems identified in the pharmaceutical industry. This research also provides an approach for similar research in other R & D intensive industries. However, the time and cost of performing such an exercise is likely to limit the industry approach to accounting for R & D costs. The research led to the conclusion that the accounting standard for research and development costs in South Africa is difficult to apply consistently in practice, and requires amendment if it is to obtain the support of the accountancy profession and commerce. DA - 1998 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 1998 T1 - The application of AC 122 to research and development, in the pharmaceutical industry : conceptual issues and implementation concerns : a case study TI - The application of AC 122 to research and development, in the pharmaceutical industry : conceptual issues and implementation concerns : a case study UR - http://hdl.handle.net/11427/17534 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/17534
dc.identifier.vancouvercitationde Waal MS. The application of AC 122 to research and development, in the pharmaceutical industry : conceptual issues and implementation concerns : a case study. [Thesis]. University of Cape Town ,Faculty of Commerce ,College of Accounting, 1998 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/17534en_ZA
dc.language.isoengen_ZA
dc.publisher.departmentCollege of Accountingen_ZA
dc.publisher.facultyFaculty of Commerceen_ZA
dc.publisher.institutionUniversity of Cape Town
dc.subject.otherAccountingen_ZA
dc.subject.otherPharmaceutical Industryen_ZA
dc.subject.otherResearch and Development costsen_ZA
dc.titleThe application of AC 122 to research and development, in the pharmaceutical industry : conceptual issues and implementation concerns : a case studyen_ZA
dc.typeMaster Thesis
dc.type.qualificationlevelMasters
dc.type.qualificationnameMComen_ZA
uct.type.filetypeText
uct.type.filetypeImage
uct.type.publicationResearchen_ZA
uct.type.resourceThesisen_ZA
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
thesis_com_1998_de_waal_margaret_suzanne (1).pdf
Size:
7.22 MB
Format:
Adobe Portable Document Format
Description:
Download
Collections
Masters