(ii) Steel Berhad is a public listed company that provides engineering and operational support services to aircraft manufacturers. During the year, Steel Berhad, received a confirmed order from a well-known aircraft manufacturer to develop new designs for ducting the air conditioning of their aircraft. For this project, Steel Berhad needed funds totaling RM1 million and was able to obtain funding of RM1 million from a major bank in Malaysia.

The expenditure Steel Berhad incurred in pursuance of its research and development project follows, in chronological order:

15 July 2015: Paid RM175,000 towards salaries of the engineers and consultants.

30 September 2015: Incurred RM250,000 towards the cost of developing the duct and producing the test model.

15 December 2015: Paid additional RM300,000 for revising the ducting process to ensure that the product can be introduced in the market.

15 February 2016: Developed (at cost of RM80,000) the first model (prototype) and tested it with the air conditioners to ensure compatibility.

15 April 2016: A focus group of other engineering providers was invited to a conference for the introduction of this new product. Cost of the conference was RM50,000.

30 June 2016: The development phase was completed and a cash flow budget was prepared. Net profit for the year was estimated to equal RM900,000

Required: Discuss the accounting treatment for the various costs incurred during the year in accordance with IAS 38/ MFRS 138.