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a. Research and development expenditure should always be written off as an expense b. Research and development expenditure should always be capitalised as an intangible asset c. Research expenditure should always be written off as an expense but development expenditure should always be capitalised as an intangible asset d. Research expenditure should always be written off as an expense but development expenditure should be capitalised as an intangible asset if it satisfies certain conditions
Option C and D looks similar but there is a difference on D statement which says if "if it satisfy certain conditions". The correct answer is D according IFRS no GAAP for in house R&D expenditure. In house R&D expenditures to be capitalized must satisfy certain conditions like
1. Existence of mark for the product and this can be expressed in monitory terms
2. It is probable that future economic befit will flow to the company ( to fulfill asset definition)
3. The result of the R&D is for the purpose of the company
4. The economic life of the Development must be known so as to amortize the cost
etc. What are the criteria for the purchased R&D expenditures to be capitalized.
Research expenditure should always be written off as an expense but development expenditure should be capitalised as an intangible asset if it satisfies certain conditions
Research and development expenditure should always be capitalised as an intangible asset
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