10: INTANGIBLE NON-CURRENT ASSETS

Chapter Summary

Intangible non-current assets

Research
'Investigation to gain new scientific or technical knowledge and understanding'

Development expenditure

'Application of research findings or other knowledge to produce new/substantially improved materials, processes etc'

Accounting treatment
There is no certainty of future profits Write-off as an expense in the income statement

Accounting treatment
Future profits are expected Capitalise as an intangible non-current asset if all PIRATE criteria are satisfied PIRATE: Probable future economic benefits Intention to complete and use/sell asset Resources adequate and available to use/sell asset Ability to use/sell asset Technical feasibility of completing asset for use/sale Expenditure can be measured reliably

Amortisation
Amortise asset over its useful life once asset is ready for use

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