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Accounting Theories Question
Case Study:
Bio-sustainable Feeds (BSF) Ltd.. an Austmlian bio-research finn listed on the Australian Stock Exchange (XSX), has engaged research on sustainable aqua-culture feeds for two decades. Its research on a plant based feed (canola, com. soya-bean. sunflower. etc.. meal) costing S360 million AUD (S 120 million collapsed when high-value piscavorian fish (e.g. fish eating species like salmon. trout. tuna. etc.) failed to thrive. Specifically, CBC (2016) noted that. while the plant-based fish feed was supposed to resolve the pmblem fish-based feed that ave convened at a rate of 10.0 kg of low-value fish into 1.0 kg of high value fish (i.e. the normal conversion a lower trophic level to a higher one). the conversion rate was actually 30.0 kg of plant based wet feed (before oven drying) to into kg of high value fish—plus, over of the fish died (vs. less than 1120th for the fish-based feeds), plus glowing times nearly doubled, plus the mature fish were smaller (only 60 percent of the final weights of those grown on the fish-based feeds).
The above mentioned issues are compounded by accusations from environmentalists that dive1Ting human-quality food crops into gmwing luxury fish is just as bad as diverting low value fish into that pmduction—it benefits the but puts the poor at increased risk of malnutrltlon or even starvation.
In response to the above issues. BSE Ltd. is researching the use of bacteria to ploduce fish feeds from wood chips, sugar cane residue. or recaptured methane gas (e.g. from dumps, sewage, food processmg plants). The research, which has had some success at BSF Ltd. and other facilities (Rust. et al.. 2011 : Lothe, 2013: Sarker. et al.. 2016). has cost BSE Ltd. $160 million ALTD in research to date and is expected to cost another $200 million AT-IT) in development costs to bring it to market.
BSF Ltd. received a S-fOO million AUD grant from the Commonwealth Scientific and Industrial Research Organisation (CSIRO. Federal Government of Australia) in leturn for BSF Ltd. spending at least S 100 million AUD a year on alteznative aquaen9t1me feeds. CSIRO paid the funds to BSE Ltd. three years ago (in 2013), and (during those three years) BSF Ltd. has spent a total of million AUD ($340 nüllion plus $160 million) on research and has committed to spend $200 million in developm:nt cost over the next two years to develop an alternative aquaculture feed from the research done to date.
The expected net market value of the patent is $700 million AUD if sold in two years or S200 million AUD a year for 10 years if produced and sold (remember to adjust for two years) and the appropriate discount rate for this type of project is 8 pa.
1. Please give brief idea of your assignment answer and discuss briefly about the Research and research and development(R & D).
2. Discuss nature and benefit to the society of the research being done by BSF Ltd.
a. How society will get benefit from this research?
b. Research for rich people not for poor people.
c. How poor people feed to rich people?
d. How rich people get ethical benefit from the poor people.
3. Discuss the problems with the early research done by BSF Ltd. Must find the answer of this topic from below given two paragraphs:
Bio-sustainable Feeds (BSF) Ltd.. an Australian finn listed on the Australian Stock Exchange (ASX). has engaged research on sustainable aqua-culture feeds for two decades. Its research on a plant based feed (canola. corn. soya-bean. sunflower. etc.. meal) costing S360 million AVD (S120 million collapsed when high-‘,alue piscavorian fish (e.g. fish eating species like salmon, trout. tuna. etc.) failed to thrive. Specifically. CBC (2016) noted that. while the plant-based fish feed was supposed to resolve the problem fish-based feed that are converted at a rate of 10.0 kg of low-value fish into I .0 kg of high value fish (i.e. the nonnal conversion from a lower trophic level to a higher one). the conversion rate was actually 30.0 kg of plant based wet feed (before oven drying) to into kg of high value fish—plus. over of the fish died (vs. less than 1/2CP for the fish-based feeds), plus growing times nearly doubled. plus the mature fish were smaller (only 60 percent of the final weights of those grown on the fish-based feeds).
The above mentioned issues are compounded by accusations from environmentalists that diverting human-quality food crops Into growing luxury fish is just as bad as diverting low- value fish into that production—it benefits the rich but puts the poor at increased risk Of malnutrition or even starvation.
4. RESEARCH AND RESEARCH & DEVELOPMENT
Meaning of intangible assets.
AASB(Australian Accounting Standard board) no. for research and R & D.
Definition of research
Definition of R&D.
Differences between research and R&D.
How they will accounted in financial statements.(under intangible assets with amortisation.)
Why firm engaged in research and development?(business development, improve product and services)
5. What is the fair market value of this patent in given case?(give your assumption and calculation)
6. Show the full set of journal entries fir the R&D transaction from 2013 to 2016(includes the grant from CSIRO). Remember to correctly allocate R&D cost between expense and capital. explain how and why you value the patent?
7. BSF Ltd. management asserted in a prospectus that the patent values were predicated on BSF Ltd. having exclusive control over the bacteria-based feeds technology. How reasonable is that assertion—support your answer with references to current and recent (e.g. last decade or so) research.
Accounting Assignment Solution
Fish feeds human, seems easy. However, feeding the fish isn’t as easy as it seems. BFF Ltd which is an Australian listed company is researching new ways to tackle the above problem in an ethical environmentally sustainable and project friendly manner. However, every research has its own pros and cons, which would be analyzed in the case. The first research is based on feeding the high-value fishes on plants whereas the researched new method involves feeding them on residuals that are on bacteria. (CBC, 2016) Under the fish-based feet method, do you converted at the rate of 10 KG of low-quality fish into one KG of high-value fish. However, as per the research conducted by BSF Limited which focuses on use of bacteria, woodchips, sugar cane residue etc., might be beneficial for providing better fishes and at the same time, it would be an environmental and socially friendly method of doing so (Rust, M., Barrows & others 2011). The major reason for the research and development being carried on by the firm was to resolve the issues from the environmentalists in regard to the manner the food was being used for growing luxury fishes. This was not acceptable as there is already scarcity prevailing in the current scenario……………
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