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development vs. research costs

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › development vs. research costs

  • This topic has 3 replies, 2 voices, and was last updated 5 years ago by AvatarP2-D2.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
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  • December 1, 2020 at 12:20 pm #597273
    AvatarNoah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    $400,000 spent on designing a new corporate logo for the business. Sir why is this expensed to SPL? Isn’t this an example of research put to action to generate sales and hence qualifying as developmental costs and subsequently should be capitalised!

    December 5, 2020 at 8:45 am #597716
    AvatarP2-D2
    Keymaster
    • Topics: 4
    • Replies: 7232
    • ☆☆☆☆☆

    Hi,

    No, it is just general business expenditure as you would not be able to demonstrate future economic benefit from the logo.

    Thanks

    December 17, 2020 at 11:00 am #600183
    AvatarNoah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    we can demonstrate future economic benefit from the logo, if people start to recognise our brand with the logo and the logo becomes like a hit, isn’t a good enough reason to capitalise its expenditure?

    December 22, 2020 at 8:47 pm #600599
    AvatarP2-D2
    Keymaster
    • Topics: 4
    • Replies: 7232
    • ☆☆☆☆☆

    No, how can you demonstrate that the expense is purely on a logo/brand? How do you know the benefit has come from the new brand?

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