(1) If certain criteria are met, research expenditure may be recognised as an asset. Research and Development, Uncertainty, and Analysts’ Forecasts: The Case of IAS 38 October 2015 Journal of International Financial Management & Accounting 26(3) Determine the appropriate measurement of an intangible asset. a) research phase; and b) a development phase. IAS 38 Intangible Assets 2017 - 05 3 Subsequent expenditure on an acquired in-process research and development project Research or development expenditure that: (a) relates to an in-process research or development project acquired separately or in a business combination and recognised as an intangible asset; and This means that the enterprise must intend and be able to complete the intangible asset and either use it or sell it and be able to demonstrate how the asset will generate future economic benefits. Nevertheless, from IAS 38, para 126, research and development expenditure in the year and further analysis IAS 38 para 126, analysis of R&D costs charged to income, segmental analysis, accounting policy IAS 38 paras 94-96, intangibles assigned useful life longer than contractual period as expected to … Thus, at least technically, the capitalisation of development costs is not considered a managerial choice. Acquiree’s in-process research & development project: IFRIC 32 applies IAS 38 to website costs. Recognize the disclosures required by IAS 38. If an entity cannot distinguish the research phase from the development phase of an internal project to create an intangible asset treats the expenditure on that project as if it were incurred in the According to IAS 38 Intangible assets, which of the following statements concerning the accounting treatment of research and development expenditure are true? Under IFRS (IAS 38 2), research costs are expensed, like US GAAP. Examples include: patents, licenses, & … Under IAS 38 Intangible Assets, while research costs are expensed, development costs should be capitalised, if they meet the six conditions specified in the standard. 5. • ‘research phase’ and ‘development phase’ have a broader meaning for the purpose of IAS 38. USEFUL LIFE Recognition criteria always considered met. In relation to internally generated intangibles, IAS 38 gives further guidance on classification of generation of the asset into research phase and development phase and sets rules on determination of cost of an internally generated asset. Charge all research cost to expense. See IAS 36 for impairment testing. See IAS 38 for retirements and disposals (similar to IAS 16 derecognition for PPE). IAS 38 International Accounting Standard 38 Intangible Assets ... 5 This Standard applies to, among other things, expenditure on advertising, training, start-up, research and development activities. [IAS 38.54] Development costs are capitalised only after technical and commercial feasibility of the asset for sale or use have been established. Cost = FV @acquisition date. IAS 38 covers the definition and recognition criteria for Intangible Assets. IAS 38 has illustrative examples. Research and development activities are directed to the development of knowledge. Under IAS 38, Intangible Assets are property that does not have a physical form but meets the three definition criteria: identifiable, controllable property that provides future economic benefits. Recall the rules for subsequent measurement of an intangible asset. Distinguish between research and development costs and apply the six criteria for capitalization of development expenditures. 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