Snap Ltd, a pharmaceutical company, recently started a research division in one of its factories. The total costs in respect of the new division, incurred by Snap Ltd for the current year, amounted to R55 000, and were paid as follows: RAND Salaries Chemists....25 000 Additional technical personnel appointed.5 000 Consulting fees Initial payment for the sharing of knowledge with respect to remedy *V*..1 000 General consulting work....5 000 Direct costs Tablets, chemicals and raw materials...3 000 Patents and licence.1000 Sundry...2 000 General Expenses General Overheads..5 000 Costs of partitions in the new division ..3 000 Depreciation of equipment ... .2 000 50 Additional information The total expenditure above of R55 000 may be grouped into the following categories. [R24 000 (refer point 1) + R16 000 (refer point 2) + R15 000 (refer point 3) = R55 000] 1. The division incurred the following work with regard to the development of 5 potential new remedies: Remedy *V*- It is expected that it will be marketed within the next 6 months 9 000 *I* - Project has been halted after initial work 5 000 *G* - it is expected that it will be marketed within the next year or two 6 000 *S* - In an early stage of development 3 000 *X* - In an early stage of development 1 000 2. The division also undertook testing and quality control with regard to existing products, of which development had been completed in the prior years. The total costs amounted to R16 000. 3. The remainder of the divisions expenses, namely R15 000, is in respect of general research undertaken in order to formulate potential new products which could be manufactured in the future. The costs (R55 000) were accounted for in the financial statements of Snap Ltd by debiting a fifth thereof against profit for the year. The remainder was shown in the statement of financial position under Research and development costs-in process A minute of a recent Directors meeting during which the above matter was discussed, indicates that the board of directors plan to write off a fifth of the R55 000 to profit each year. Required Discuss how the costs should be accounted for in accordance with the requirements of Statements of Generally Accepted Accounting Practice. Also indicate why the current accounting treatment is not acceptable.