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    Question

    XYZ Ltd. incurred R&D expenses of ₹20 lakhs for

    developing a new product. The product has not yet reached the commercialisation stage. How should the amount be treated?
    A Capitalised under intangible assets Correct Answer Incorrect Answer
    B Expensed off immediately Correct Answer Incorrect Answer
    C Deferred until commercialisation Correct Answer Incorrect Answer
    D Shown under non-current investments Correct Answer Incorrect Answer

    Solution

    Until technical feasibility is established, R&D expenses are expensed off as per Ind AS 38.

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