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Hello, If the question states that the project incurs a loss should the cost incurred whether development or as an asset cost should be capitalised or not? How to treat the cost when the project incurs a loss?
If the project is loss making, costs are always expensed and not capitalised. If a company is locked into a contract which is expected to be loss making, then a liability for onerous contract must be set up on the balance sheet.
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