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Chapter 5

5.3 Development

In some cases development expenditure may meet the recognition
criteria. IAS 38 Intangible Assets stipulates that this is only the case if
all of the following conditions are met:

 Completion of the asset is technically feasible

 The intention is to complete and use or sell the asset

 The asset can be used or sold

 The asset will generate future economic benefits

 Adequate resource is available to complete the asset

 The expenditure on the asset can be measured reliably.

If all of these conditions are met, the asset must be capitalised.

Illustrations and further practice

You can now try TYUs 2 and 3 from Chapter 5.

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