IFRS requires that firms expense costs during a research phase but allows firms to capitalize development-phase costs under certain conditions.Under IFRS,which of the following is not a condition that must be met for a firm to capitalize development-phase expenditures?
A)The company can reliably identify the research costs incurred to bring the project to economic feasibility.
B)The company can reliably identify the development costs incurred to bring the project to economic feasibility.
C)The project has achieved technical feasibility.
D)The company intends to complete the project and either use or sell the intangible asset.

Question

Quizplus · Accepted Answer

The condition that the company can reliably identify the research costs incurred to bring the project to economic feasibility is not required for a firm to capitalize development-phase expenditures under IFRS. The other three conditions (reliably identifying development costs, achieving technical feasibility, and intending to complete the project and use/sell the intangible asset) are necessary for a firm to capitalize development-phase expenses under IFRS.

IFRS Requires That Firms Expense Costs During a Research Phase