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on a reasonable basis.  

The standard lists the costs which may be included in R&D, where applicable (note that selling costs 

are excluded). 

 

Salaries, wages and other employment-related costs of personnel engaged in R&D activities 

 Costs 

of 

materials and services consumed in R&D activities 

 

Depreciation of property, plant and equipment to the extent that these assets are used for  

R&D activities 

 

Overhead costs, other than general administrative costs, related to R&D activities; these costs are 

allocated on bases similar to those used in allocating overhead costs to inventories (see IAS 2 

Inventories) 

 

Other costs, such as the amortisation of patents and licences, to the extent that these assets are 

used for R&D activities 

2.4 Recognition of R&D costs 

The relationship between the R&D costs and the economic benefit expected to derive from them will 

determine the allocation of those costs to different periods. Recognition of the costs as an asset will only 

occur where it is probable that the cost will produce future economic benefits for the entity and where 

the costs can be measured reliably.  

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CHAPTER 9  

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  INTANGIBLE NON-CURRENT ASSETS