In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research is recognised as an expense when it is incurred.
Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured.
Intangible assets are initially recognised at cost. Subsequently, they are revalued based on fair value, less subsequent amortisation and impairment losses.
Under the revaluation model, revaluation increases are recognised in other comprehensive income and accumulated in the revaluation surplus.
When it's not feasible to distinguish between the research and development phases of an internal project, the expenditure is treated as if it were all incurred in the research phase only. This clear guideline ensures consistent treatment of expenditure in such situations.