When Research and Development Costs Are Incurred in the Expectation

question 21

Multiple Choice

When research and development costs are incurred in the expectation of future benefits but it is not possible,at the reporting date,to establish that it is probable that future economic benefits will eventuate,then:

• A) the costs should be recognised as an asset
• B) the costs should be recognised as expense together with estimated revenue
• C) the costs should be recognised as expense prior to recognition of revenues
• D) no action should be taken.

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Definitions:

Socialization

The method through which people acquire and assimilate the customs, principles, actions, and interpersonal abilities relevant to their community or social circle.

Resocialization

Resocialization occurs when powerful socializing agents deliberately cause rapid change in one’s values, roles, and self-conception, sometimes against one’s will.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, including ways of thinking, feeling, and behaving.

Socialization

The lifelong process through which people learn the norms, values, behaviors, and social skills appropriate to their society.