Context · Dated fact of the file
Orvane Medical: from the lab to the VELA cardiac patch
Orvane Medical SA, a fictitious medical technology company (120 employees), year end 31 December.
IAS 38 · Case studies (Step 3 of 5)
Practical case
- Course
- Exercises
- Case studies
- Workpapers
- Exams
File · Progressive casePath L1 → L4L1 · Fundamental
Orvane Medical: from the lab to the VELA cardiac patch
Orvane Medical SA, a fictitious medical technology company (120 employees), year end 31 December.
1 document3 tasks
- Period
- Year N-1 and beginning of year N
- Standards
- IAS 38 — Intangible Assets
- Levels
- 0 / 4 levels validated
- Current level
- L1 · Guided≈ 35 min
Assistance levelFull guidance · strong assistance
- Method: shown
- Checklist: shown
- Hints: shown
- Step-by-step work: shown
Case brief
L1 · Guided · Year N-1 and beginning of year N
Level 1 — Research or development?
Orvane Medical is designing a connected patch, VELA, which monitors patients' heart rhythm at home and sends the data to the hospital. You follow the project from its initial research (year N-1) to its release for production (year N+1), first in a guided way, then as an auditor or a group reporting manager would. All figures are case data; teaching assumptions and professional judgements are flagged as such. Orvane applies the cost model to its intangible assets (case data).
Standard involved: IAS 38 Intangible Assets (internally generated projects). Before quantifying anything, you need to know in which phase each activity of the VELA project sits: the research phase and the development phase are not accounted for in the same way. Read the project log, then answer the three questions.
Fundamental level: the method, help and references are shown.
Method
- 1Read the brief and the assignment.
- 2Open each document and spot the relevant data.
- 3Carry out the work in the suggested order.
- 4Submit, then read the conclusion and the model answer.
File checklist
- Open each piece (0 / 1 consulted) · to do
- Answer the questions of the level (0 / 3) · to do
- Validate the level, then read the conclusion · to do
Events
The file, period by period
2 / 6 stages reached
Initial event · L1·Year N-1 and beginning of year N · Current stage
Level 1 — Research or development?
Standard involved: IAS 38 Intangible Assets (internally generated projects). Before quantifying anything, you need to know in which phase each activity of the VELA project sits: the research phase and the development phase are not accounted for in the same way. Read the project log, then answer the three questions.
Pieces added
- VELA project log (extract)
New period · L2·Year N · Upcoming: unlocks after the current stage
Upcoming stage
New period · L3·Year N closing · Upcoming: unlocks after the current stage
Upcoming stage
New period · L4·Year N+1 · Upcoming: unlocks after the current stage
Upcoming stage
Conclusion · Upcoming: unlocks after the current stage
Upcoming stage
Documents
Case documents
1 document to work from at this level.
Document 1Extract
VELA project log (extract)
- Year N-1: review of the scientific literature on materials able to pick up a heart signal through the skin (cost EUR 80,000, recognised as an expense in the published N-1 financial statements).
- January-March N: comparison of three sensor technologies (dry electrodes, gel, conductive textile) and final selection of the dry electrode (cost EUR 120,000).
- April-June N: design, construction and testing of pre-production prototypes of the patch (cost EUR 210,000).
- July-December N: design of moulds using a new injection technique for the patch casing, then operation of a small pilot line whose size does not allow profitable commercial production.
- Planned for N+1: training of the sales force and launch advertising campaign.
Data
Facts of the file
- Entity
- Orvane Medical SA, a fictitious medical technology company (120 employees), year end 31 December.
- Period
- Year N-1 and beginning of year N
- Current level
- L1 · Guided
- Standards
- IAS 38 — Intangible Assets
Pieces carried over from earlier levels
First level: all the data is in the brief and the pieces of this level.
Questions
3 parts to answer, marked when you submit the level.
- Information to identify1
- Questions2
Information to identify
Find the useful facts in the pieces before concluding.
Part 1 · Classification · Recognition
Classify each activity of the VELA project in the right category.
ItemResearch phaseDevelopment phaseNeither research nor development (expense outside the R&D project)
Review of the scientific literature on sensing materials (N-1)
Comparison of three sensor technologies and final choice of the dry electrode
Design, construction and testing of the pre-production prototypes
Design of moulds using a new injection technique
Operation of a pilot line too small for profitable commercial production
Sales force training and launch advertising campaign
2 more questions will appear once the current question is complete.
Complete the question to continue.
Workspace
Your working draft for this file: points noted, leads, intermediate calculations.
Saved on this device only; never graded.
Conclusion
Answer every part to submit the level and see the conclusion.
Normative references
- IAS 38 §52
- IAS 38 §53
- IAS 38 §54
- IAS 38 §56
- IAS 38 §57
- IAS 38 §59
- IAS 38 §61
- IAS 38 §63
- IAS 38 §65
- IAS 38 §66
- IAS 38 §67
- IAS 38 §69
- IAS 38 §71
- IAS 38 §97
- IAS 38 §126
- IAS 38 §127
- IAS 36 §10