CERTYNEX IFRS ACADEMY

Ivora separately acquired an in-process battery project, recognised as an intangible asset. The project is now in its development phase and technical feasibility is demonstrated, but at the year-end Ivora has not obtained the financing needed to complete it. Development expenditure for the year amounts to 300,000. The finance director proposes to add it to the carrying amount of the project, since the project is already an asset. Which treatment should be adopted?

Add it to the carrying amount, as the acquisition has already validated recognition of the project

Expense it, because not all the development-phase criteria are demonstrated

Add it to the carrying amount, up to the price originally paid for the project

Hold it in a suspense account until financing is obtained, then decide