CERTYNEX IFRS ACADEMY

Two research projects on composite materials are at the same stage. The first has been run internally by Arvelle from the outset; the second is taken over by Arvelle when it acquires Duna in a business combination, and it meets the definition of an intangible asset. Which comparison is correct in Arvelle's consolidated financial statements?

Both projects are treated in the same way: their research expenditure is expensed and no asset is recognised

Both projects are recognised as intangible assets, at the cumulative research expenditure incurred by each entity

The project taken over from Duna is recognised separately from goodwill; the research expenditure of the internal project is expensed

The project taken over from Duna is subsumed in goodwill; the expenditure of the internal project is capitalised