Which of the statements about development costs is correct

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Problem 1: For a growing firm, capitalizing costs may result in higher earnings over an extended period because:

A. The cost depreciated each period is less than the amount capitalized each period.

B. The cost depreciated each period is more than the amount capitalized each period.

C. Capitalizing costs does not affect earnings over an extended period.

Problem 2: According to IFRS, which of the following statements about research and development costs is most correct?

A. Research costs are capitalized and development costs are expensed as incurred.

B. Research costs are expensed as incurred and development costs are capitalized.

C. Both research and development costs are expensed as incurred, unless the costs have an alternative use.

Reference no: EM132636970

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