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UK companies, under both UK GAAP and IFRS, have specific rules for accounting R&D costs. UK GAAP expenses all research and development costs as they occur alligning with a conservative financial reporting approach. This means recognizing all related costs as expenses in the period incurred reflecting the prudence concept for cautious financial statements.
IFRS allows capitalization of certain development costs if strict criteria are met. This includes demonstrating technical feasibility, intention to complete and use or sell the asset, and reliable measurement of expenditures. Capitalized costs are then spread over the asset useful life.
IFRS allows capitalization of certain development costs if strict criteria are met. This includes demonstrating technical feasibility, intention to complete and use or sell the asset, and reliable measurement of expenditures. Capitalized costs are then spread over the asset useful life.