Research and development costs

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....and the presentation and disclosure in cost statements. 2. Objective The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Research, and Development Costs with reasonable accuracy and presentation of the same. 3. Scope This standard should be applied to cost statements that require classification, measurement, assignment, presentation and disclosure of Research, and Development Costs including those requiring attestation. 4. Definitions The following terms are being used in this standard with the meaning specified. 4.1 Abnormal cost: An unusual or atypical cost whose occurrence is usually irregular and unexpected and/ or due to some abnormal situation of the production ....

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....hich are not directly identifiable or allocable to a cost object. 4.11 Research and Development: 4.11.1 Research: Research is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding7. 4.11.2 Development: Development is the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services prior to the commencement of commercial production or use8. 5. Principles of Measurement 5.1 Research, and Development Costs shall include all the costs that are directly traceable to research and/or development activities or that can be assigned to research and....

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....nd Development Activity. 5.3 Any abnormal cost where it is material and quantifiable shall not form part of the Research, and Development Cost. 5.4 Fines, penalties, damages and similar levies paid to statutory authorities or other third parties shall not form part of the Research, and Development Cost. 5.5 The amortisation of an intangible asset arising from the development activity shall be treated as set out in the CAS 16 relating to Depreciation and Amortisation. 5.6 Research, and Development costs shall not include imputed costs. 5.7 Credits/recoveries relating to Research, and Development cost, if material and quantifiable, including from the sale of output produced from the Research and Development activity shall be deducted fro....

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....ied. 6.5 Development costs attributable to a saleable service e.g providing technical know-how to outside parties shall be accumulated separately and treated as cost of providing the service. 7. Presentation 7.1 Research and Development costs relating to improvement of the process or products or services shall be presented as a separate item of cost in the cost statement under cost of production. 7.2 Research, and Development costs which are not related to improvement of the process, materials, devices, processes, systems, product or services shall be presented as a part of the reconciliation statement. 8. Disclosures 8.1 The cost statements shall disclose the following: 1. The basis of accumulation and assignment of Research and De....