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Research and Development


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Do we reflect R&D allowance for subcontractor when preparing accounts? and If yes, How? Or Just in corporation tax?

Mnay Thnaks


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By Ruddles
22nd Dec 2017 09:52

Since you are an accounts assistant, is there not someone more senior that you can ask for help?

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By Steadfast
09th Jan 2018 23:00

For SME's the R&D allowance reduces profits for corporation tax purposes.
As regards the accounting treatment see ACCA's article on FRS 102 on intangible assets:
"There are no significant differences between the research and development distinction and relevant accounting treatment prescribed by the old and the new UK GAAP. Whilst strict criteria to write off research costs applies in the initial stages of development projects, in case of established development projects of definitive feasibility, FRS 102 offers a choice to either write costs off as they are incurred, or capitalise and amortise them over the useful life of the asset.

This treatment is markedly different from that of IFRS - IAS 38 states that, when the relevant strict asset recognition criteria are met, development costs must be capitalised."

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