Assume you are Controller of Misrah, Inc., a pharmaceuticals research and manufacturing firm which is publicly traded. Misrah’s CFO, BainsworthForent, would like to begin planning for an anticipated move in the United States to International Financial Reporting Standards (IFRS). Misrah is currently developing a new diet pill which would be accounted for under IFRS. This Diet Pill Project’s expected timeline is shown below.
• January 1, 2013: $100,000 for experiments on mice.
• January-December2013: $2,500,000 for salaries, rent on facilities, and supplies for full-time R&D staff who work on the Diet Pill Project as well as other projects for Misrah.
• January 17, 2013: $600,000 for testing to determine which of two diet pill prototypes is the most efficient.
• February 10,2013: $300,000 on manufacturing of the diet pillprototype chosen based on the January 17 testing.
• May 1, 2013: Canadian regulatory approval of the diet pill is expected to be obtained.
• January 18, 2015: The diet pill is expected to be made publicly available for sale.
Earlier today, both you and BainsworthForentattended a meeting of the Diet Pill Project team. After the meeting, Mr. Forentsent you the following email:
• Analyze, interpret, and applythe IFRS standardsto a set of facts to arrive at conclusions and recommendations, and compare to U.S. GAAP based on research of appropriate accounting literature.
• Effectively communicate analysis in a clear, concise, well-organized internal memorandum (“memo”) containing proper citation.
Writing Task: Memo
Based on your research and analysis, prepare a onepage memoin your role as Controller to BainsworthForent, CFO. Please list your references on a separate page attached to your memo.
Your memo should address the three questions posed in Mr. Forent’s email to you, provided on the first page of this assignment.
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