Assoria Plc has $20 million of capitalised development expenditure at cost brought forward at 1 October 2022 in respect of products currently in production. A new project began on 1 October 2022. The research stage of the new project lasted until 31 December 2022 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 2023 the directors of Assoria Co became confident that the project would be successful and yield a profit well in excess of costs. The project was still in development at 30 September 2023. Capitalised development expenditure is amortised at 20% per annum using the straight-line method. What amount will be charged to profit or loss for the year ended 30 September 2023 in respect of research and development costs?
Assoria Plc has $20 million of capitalised development expenditure at cost brought forward at 1 October 2022 in respect of products currently in production. A new project began on 1 October 2022.
The research stage of the new project lasted until 31 December 2022 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 2023 the directors of Assoria Co became confident that the project would be successful and yield a profit well in excess of costs. The project was still in development at 30 September 2023. Capitalised development expenditure is amortised at 20% per annum using the straight-line method.
What amount will be charged to profit or loss for the year ended 30 September 2023 in respect of research and development costs?
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