Under IFRS, development costs can be:

A Always expensed

B Capitalized if certain criteria are met (technical feasibility, intent to complete, etc.)

C Never capitalized

D Recorded as revenue

✓ Correct Answer: Option B

IAS 38 allows capitalization of development costs when technical feasibility, intent, ability to use/sell, and future economic benefits are demonstrated.

💡 Why is B) the correct answer?

The correct answer to the question "Under IFRS, development costs can be:" is Option B: Capitalized if certain criteria are met (technical feasibility, intent to complete, etc.).

The other options — A) Always expensed, C) Never capitalized, D) Recorded as revenue — are incorrect for this CFA Exam Prep question. As explained above: IAS 38 allows capitalization of development costs when technical feasibility, intent, ability to use/sell, and future economic benefits are demonstrated.

📚 About This CFA Exam Prep Practice Question

This 3-level CFA Exam Prep question from the Financial Reporting & Analysis topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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Under IFRS, development costs can be:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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