Research and Development Expenditure Flashcards

1
Q

What is included in IAS 38?

A

Research and development

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2
Q

What is research?

A

Original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding

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3
Q

What is development?

A

Application of research findings or other knowledge to a plan or design for the production of new or substantially improved

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4
Q

Example of substantially improved in development?

A

Materials
Devices
Products
Processes
Systems or services

Before the start of commercial production or use

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5
Q

What cannot happen with research?

A

It cannot be capitalised as an intangible asset and must be expensed to SOPL

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6
Q

Under IAS 38, an entity must capitalise development expenditure if it satisfies all criteria (P)

A

Probable future economic benefits

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7
Q

Under IAS 38, an entity must capitalise development expenditure if it satisfies all criteria (I)

A

Intention to complete and use/sell asset

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8
Q

Under IAS 38, an entity must capitalise development expenditure if it satisfies all criteria (R)

A

Resources adequate and available to complete and use/sell asset

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9
Q

Under IAS 38, an entity must capitalise development expenditure if it satisfies all criteria (A)

A

Ability to use/sell the asset

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10
Q

Under IAS 38, an entity must capitalise development expenditure if it satisfies all criteria (T)

A

Technical feasibility of completing asset for use/sale

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11
Q

Under IAS 38, an entity must capitalise development expenditure if it satisfies all criteria (E)

A

Expenditure can be measured reliably

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