IAS 38Chapter 6Lesson 1
Research and development
Step 1 of 10Learning objectives
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How to account for the expenditure of an internal project: research is always expensed, development is capitalised only from the day six demonstrations are first all met, only directly attributable costs incurred from that date form the cost of the asset, and the asset, if its useful life is finite, is amortised once it is available for use.
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Learning objectives
- Distinguish the research phase from the development phase and classify the activities of an internal project.
- Explain why research is always an expense and deal with a project whose phases cannot be separated.
- Test the six demonstrations and date the day from which development must start being capitalised.
- Calculate the cost of the asset (included and excluded costs, with no reinstatement) and record the entries.
- Identify the consequences after recognition (end of capitalisation, amortisation, impairment test) and document the file.