The companies act does not require disclosure of the total amount of research and development expenditure during an accounting period, but accounting standards requires that all large companies should disclosure this total, distinguishing between current year expenditure and amortization of deferred development expenditure.
Accounting standards requires the following companies to disclose research and development expenditure.
- All public companies
- All special category companies
- All holding companies with a public limited companies or special category company as a subsidiary
- All companies who satisfy the criteria, multiplied by 10, for defining a medium sized company
Where differed development costs are included in a company’s balance sheet the following information must be given in the notes to the accounts:
- Movements on deferred development expenditure, and the amount brought forward and carried forward at the beginning and end of the period.
- The accounting policy used to account for research and development expenditure should be clearly explained.