Cerise Ltd (Cerise) has a year end of 30 April 2021. The company began developing a project on 1 May 2020, incurring total development costs up to the year end of £270,000 which were incurred evenly throughout the year. Cerise also incurred a one-off training expense for its employees to learn how to use the new product, costing £12,000 on 13 March 2021. This was incurred in addition to the £270,000 development costs. The relevant criteria for capitalisation according to IAS 38 Intangible Assets have been met by project Magenta from 1 January 2021. How much would be eligible for capitalisation for this project for the year ended 30 April 2021? a) £270,000 b) £78,000 c) £90,000 d) £102,000 Which option is correct and why
Cerise Ltd (Cerise) has a year end of 30 April 2021. The company began
developing a project on 1 May 2020, incurring total development costs up to the year end of £270,000 which were incurred evenly throughout the year. Cerise also incurred a one-off training expense for its employees to learn how to use the new product, costing £12,000 on 13 March 2021. This was incurred in addition to the £270,000 development costs.
The relevant criteria for capitalisation according to IAS 38 Intangible Assets
have been met by project Magenta from 1 January 2021. How much would be eligible for capitalisation for this project for the year ended 30 April 2021?
a) £270,000
b) £78,000
c) £90,000
d) £102,000
Which option is correct and why
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