Psi Ltd
 Date: 31 December 2023

Details:

• Raw materials inventory (leather):
  • Cost: £28,000
  • Replacement cost: £30,000
• Finished goods inventory:

Product	Sigma	Tau
Direct costs	£55,000	£45,000
Proportion of fixed overhead	£10,000	£8,000
Proportion of selling costs	£2,500	£2,000
Net realizable value	£80,000	£60,000

• Office machinery:
   Acquired on 1 January 2016 for £250,000, depreciated over 10 years using the reducing balance method.
• Freehold property:
   Acquired 20 years ago for £1,800,000, land value estimated at £450,000. Buildings are depreciated over 55 years.
• Research and development:
  • Research costs: £110,000
  • Development costs: £140,000, benefiting over 4 years.

Required:
 Determine the appropriate accounting treatment for these items in Psi Ltd's financial statements as of 31 December 2023.