Additionally, Chemclean is interested in another compound, Yacton, which is being developed by Jomaster. The compound is in the second phase of development. The intellectual property of compound Yacton has been put into a newly formed shell company, Conew, which has no employees. The compound is the only asset of Conew. Chemclean is intending to acquire a 65% interest in Conew, which will give it control over the entity and the compound. Chemclean will provide the necessary resources to develop the compound.
Discuss how the compound Volut should be accounted for in the financial statements of Chem Clean.
Discuss how the right to receive royalty from sales should be recorded by Chem Clean.
Discuss how Chem Clean should treat Yacton.