ll During 2015, Agora plc spent 120,000 on Research and Development (R&D) developing a...
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During 2015, Agora plc spent 120,000 on Research and Development (R&D) developing a new type of waterproof paper. These R&D investments were done after a market study in 2014 had shown that multiple users worldwide would be willing to place orders for 1 million for such paper. Agora has capitalized the 120,000 as a development cost and amortizes these costs over 5 years (zero residual value; full year of amortization in 2015; calendar fiscal year). On 1 January 2016, it was made public that a similar technology was patented on December 30, 2015 by Papyrus SE, a German competitor. The proceeds of the technology developed by Agora therefore drop to 30,000 (7,500 per year for the following 4 years). The relevant discount rate is 7%. What are the consequences, if any, of this new information that reached Agora in 2016? Record the necessary journal entry on 1 January 2016 following IFRS
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