Question

Under IFRS, amortization of capitalized development costs begins when?

1) development is complete
2) development begins
3) the asset is ready for use
4) the asset is sold
5) research is complete

Answer 1

Amortization of capitalized development costs under IFRS starts when the asset is ready for use, not necessarily when it starts being used, development is complete, or sold.

Step-by-step explanation:

Under IFRS (International Financial Reporting Standards), the amortization of capitalized development costs begins when the asset is ready for its intended use, which is option 3. This occurs after the development phase has been completed and the asset is available for use, even if it is not being used immediately. The process of amortization spreads the cost of the asset over its useful life, reflecting the consumption of the asset's economic benefits over time.