Asked by Hloni Nkolanyane on May 23, 2024
Verified
Under IFRS,research must be expensed but some development expenditures may be capitalized.To capitalize development expenditures,firms must demonstrate several factors that include all of the following except
A) technical feasibility.
B) length of time the intangible asset is expected to provide benefits.
C) ability to use or sell the asset.
D) how the intangible asset will generate probable future economic benefits.
Technical Feasibility
An assessment of whether a proposed technology or project can be implemented with existing technical resources and how it can meet the requirements of the project.
Development Expenditures
Costs incurred in the design, implementation, and testing of new products or processes, which may be capitalized or expensed, depending on their nature and future benefit.
- Determine the methodology for allocating the expense of intangible assets and acknowledging costs.
Verified Answer
HS
Harpreet SandhuMay 27, 2024
Final Answer :
B
Explanation :
Under IFRS, to capitalize development expenditures, firms must demonstrate technical feasibility, ability to use or sell the asset, and how the intangible asset will generate probable future economic benefits. The length of time the intangible asset is expected to provide benefits is not a criterion for capitalization.
Learning Objectives
- Determine the methodology for allocating the expense of intangible assets and acknowledging costs.