CAPITALISING RESEARCH AND DEVELOPMENT COSTS ON TRANSITION TO IFRS

摘要

DEF Ltd is a business that manufactures microchips. Management is proposing to convert from UK GAAP to International Financial Reporting Standards for the current year end. The company has invested a significant amount in researching and developing its products - they are new to the market and there is no record of previous sales for similar products. Under UK GAAP, the directors had chosen to expense development costs. What is the treatment of R&D costs on adoption of IFRS?