How Should Research and Development Costs Be Accounted For, According

question 5

Multiple Choice

How should research and development costs be accounted for, according to an IASB Statement?

• A) Must be capitalized when incurred and then amortized over their estimated useful lives.
• B) Must be expensed in the period incurred.
• C) May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved.
• D) Must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable.

---

Definitions:

Not Criminally Responsible

A legal defense asserting that a person was suffering from a significant mental disorder at the time of committing an act, rendering them incapable of understanding the nature or wrongness of the act.

Mental Disorder

A condition that affects a person's thinking, feeling, behavior, or mood, significantly interfering with daily life.

Stress-Vulnerability Model

A theory suggesting that the development of psychiatric disorders results from the interaction between environmental stressors and an individual's biological vulnerability.

Schizophrenic Disorders

A group of severe mental disorders characterized by disordered thoughts, delusions, hallucinations, and often a split between emotional and cognitive functions.