I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

 

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(a) 

In the case of research costs, this will not be the case due to uncertainty about the resulting 

benefit from them. So they should be expensed in the period in which they arose.  

(b) 

Development activities tend to be much further advanced than the research stage and so it may 

be possible to determine the likelihood of future economic benefit. Where this can be determined, 

the development costs should be carried forward as an asset. 

2.4.1 Research costs 

Research costs should be recognised as an expense in the period in which they are incurred (IAS 38, 

para. 54). They should not be recognised as an asset in a later period (IAS 38, para. 71).  

2.4.2 Development costs 

Development expenditure must be recognised as an intangible asset if, and only if, the business can 

demonstrate that all of the criteria in IAS 38 have been met (IAS 38, para. 57). 

 

The recognition criteria are as follows. 

The entity must demonstrate:  

