Hi mike
In the solution you amortised the 20 million development expenditure. Was the portion that was capitalised on the new project (4800) not amortised as it is not yet available for use (still in development stage)?
Also just to reaffirm my understanding was did the capitalisation of the new project start on 1.4.09 as it met the criteria of an intangible asset, ie, it is now 'probable that future economic benefits will flow and costs can be reliably measured' as the directors are now confident that the project will be successful and yield profits?
Many thanks
Hugh
Ask the Tutor ACCA FR
Mini exercises q4 non current assets p200
Yes (from memory) the new project was not yet on line and not yet contributing to profits / revenue.
Following the matching concept we don't expense write downs of assets until those assets are generating profits / revenues
And "Yes" to the question in your second paragraph!
Thanks mike
You're welcome
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