Hello Limited is a company that manufactures telephones under its own brand, as well as distributing and selling other telephone brands. Recently Hello Ltd has been conducting a research project to develop a mobile phone with various functions that could be used under water. The company is hiring experts from around the world and is spending a considerable amount of money to fund this project.

Required:

Refer to conceptual framework to discuss whether the amount spent for the research project should be considered as an asset and recognised in the statement of financial position.