In connection with IAS 38 Intangible Assets:

(a) Define ‘applied research’ and ‘development’.

(b) Why is it considered necessary to distinguish between applied research and development expenditure, and how does this distinction affect the accounting treatment?

(c) State whether the following are included within the IAS 38 definition of research and development, and give your reasons:

(i) market research

(ii) testing of preproduction prototypes

(iii) operational research

(iv) testing in search of process alternatives.