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?
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FRF7 IAS 38 & IAS16
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.
sush97 - this situation is clearly illustrated in the lecture notes! (In 2 examples!)
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