Economics · Accounting Standards

A pharmaceutical company undergoes its annual audit. The auditor notes the following actions taken by management: 1. Spent ₹50 crore on a Phase 2 clinical trial research project for a new drug and capitalized the entire amount as an 'Intangible Asset'. 2. Received a government grant of ₹5 crore for this research and credited it directly to the General Reserve. 3. Discovered a policy of not providing for 'Ex-gratia' payments to employees until paid, despite being approved at the Board meeting in March. 4. Changed the inventory valuation method from Weighted Average to FIFO solely because FIFO resulted in a higher closing stock value and higher profits. Evaluate the compliance of these actions with standard accounting principles and standards.