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INTANGIBLE ASSETS

(a) The research phase

• No intangible asset arising from research shall be

recognised. Expenditure on research shall be

recognised as an expense when it is incurred. (IAS
38.54)

• The reason for this is that, in the research phase of a

project, an entity cannot demonstrate that an

intangible asset exists that will generate probable

future economic benefits. (IAS 38.55)

• Examples of research activities are:

• activities aimed at obtaining new knowledge;

• the search for, evaluation and final selection of, applications
of research findings or other knowledge;

• the search for alternatives for materials, devices, products,

processes, systems or services; and
• the formulation, design, evaluation and final selection of

possible alternatives for new or improved materials, devices,
products, processes, systems or services. (IAS 38.56)

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