Blanco Chemical Company

spent 15,000,000 in development efforts to create a fertilizer for

which it was able to obtain a patent; however, the expected distribution

costs make it infeasible to market the chemical in the foreseeable

future. According to IAS 38 (Intangible Assets), how should Blanco

Chemical Company record the 15,000,000?

Answer

as a "Deferred Development Cost" on the Balance Sheet

as "Fertilizer Revenue" on the Income Statement

as "Development Expense" on the Income Statement

It should only be reported in the notes to the financial statements.