Research or development?

I’ve surely answered this earlier today on a different thread. Are you posting your questions more than once on different threads?

Research and development costs MUST be capitalised if the criteria from the IAS are met.

But the criteria prevent the capitalisation of research costs – so only development expenditure is capitalisable.

One of the criteria for the capitalisation of development expenditure is that the development must be of a clearly defined project and the directors must have determined that that project is financially viable

Your own post says ” further surveys will berequired to establish the nature n extent of deposits.B has to decide whether its extraction is commercially viable”

Two matters arise here – firstly the research phase has not yet been completed so no capitalisation yet.

Second, the post actually says we have not yet decided on commercial viability

So, on two grounds the current expenditure is not capitalisable.

The license? How can you capitalise (in the light of the above reply) when the license will gain in value only on the occurrence of some substantially uncertain future event.

I’ve just had my first chance to check the printed solution in the Kaplan text and I believe it says the same as I said. It’s a matter of capitalising the cost of the intangible but NOT the anticipated benefits