For each of the following issues determine whether the item should be

• Capitalised as an intangible
• Expensed to the Statement of Profit or Loss (Income Statement)

• £200,000 spent on developing a new process that will not bring in new revenue, but will deliver cost savings
• £800,000 spent on developing a new product. A competitor has already brought a similar product to the market. The directors are uncertain if they will commit any further funds.
• £500,000 spent on marketing a new product. This has led to increased sales of £1 million
• £750,000 has been spent on developing a new product. The future benefits have been estimated at £500,000.