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hello sir,
ques 1:IAS 38 provides examples of research and development activities, for example:
1 Formulating new products
2 Testing pre-production prototypes
3 Designing tools involving new technology
4 Constructing a pilot plant
Which of these examples are development activities?A 1, 2 and 3
B 1, 2 and 4
C 1, 3 and 4
D 2, 3 and 4the answer is D
it is from acca study hub quiz and no expanation is given
kindly clarify why number 2 is in answer and not 1Ques 2-
A company has incurred the following costs in operating a pilot plant for the manufacture of a new product:1 Amortisation of a licence granted to manufacture the product
2 Expenditure on material consumed in the operation of the plant
3 Costs incurred in training staff to operate equipment in the plant
4 Depreciation of equipment in the pilot plant
Which of these examples are development activities?A 1, 2 and 3
B 1, 2 and 4
C 1, 3 and 4
D 2, 3 and 4answer is B
kindly explain why number 3 isnt there when it is adding to personnel development and 1,2,4 as wellplease guide me
thank you in advanceQ1 Development is working on a new product that had already been decided upon, as I explain in my lectures. Choice 1 is effectively looking for a new product, which is research and not development.
Q2 Development costs are capitalised (provided they meet the criteria). Training staff is never capitalised and will be expensed in the profit statement regardless of it being related to the manufacture of a new product.
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