Reference no: EM132822512

Question 1: In the year to September 2020 we spent considerable sums of money designing a new product. We spent the six months from October 2019 to March 2020 researching into the feasibility of the product. We charged these research costs to the profit and loss account. From April 2020, we were confident that the product would be commercially successful and we fully committed ourselves to financing its future development. We spent most of the rest of the year developing the product, which we will begin to sell in the next few months. These development costs have been recognised as intangible assets in our statement of financial position. How can this be right when all these research and development costs are design costs?