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A research and development costs were incurred on a new project which commenced on 1 April 2012. The research stage of the new project lasted until 30 June 2012 and incurred RM1.4 million. From that date the project incurred development costs of RM500,000 per month. On 1 October 2012 the directors became confident that the project would be successful and yield a profit well in excess of its costs. The project is still in development as at 31 March 2013.
Question 1: Explain the accounting treatment for research and development.
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