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CHAPTER ONE

INTRODUCTION

1.0   BACKGROUND OF THE STUDY

The essence of this topic is to trace the need of assets for research in the achievement of development. In most organization and institution there is research and development units. This is due to the emphasis laid on technology growth by federal government. The research carried out by these unit’s vary from one institution to another this may fall under industrial research agricultural research scientific research food research, market research etc. These type of research may come under what standard statement of accounting practice grouped as the main basic types of research. Due to these research which are being carried out by different organization a lot of benefit has accrued to have a conventional method for reporting research and development expenditures.          
The first standard on accounting treatment of research and development expenditure it known as statement of financial standard twelve (DFS)12 was issued in USA in 197A. In January 1985 the accounting standard committee also published exposure draft 12 (ED)12 accounting for research and development expenditure in (GD)1A expenditure on pure and applied research was considered to be part of continuing operation which required to maintain a company business and its competitive position. These two standard DSF 12 and ED1A required expenditure whether pure or applied should be accounting with comparative minor exception. The standard did recognize that a case could be made for capitalizing development expenditure, but it concluded that uncertainties were too great. The exposure draft ended in April 1885 but a last later in 1986 a revised expenditure draft came into being that development expenditure could be matched clearly to future benefit which were reasonably certain. In December 1987 standard statement of accounting practice appeared essentially the same as ED1A but with some important different of which one instead of requiring companies to compulsory before the expending of certain development expenditure it allowed them on option via.    
1.1    STATEMENT OF PROBLEM
In recent years government has participated actively in caring out research projects. This is in order to realized its objective of making the country self sufficient and to increase the technological growth of the nation. Considering these research range from scientific and material research e.t.c. the most current ones are the production of palm kernel, cracking madding garri pealing frying machines, and extraction of Soya beans milk. Another problem to time topic is to identify the prudent procedures for fund allocation to research and development institution in carrying out such research. Furthermore the problem of that research work show’s the assets that constitute plant property, equipment of the institute that carrying such property and equipment of the institute carrying out the research.  Research institution are sometimes over loaded with a lot of financial burden and such are confused on which of the hand development cost. Accounting treatment of research and development cost is also too controversies thereby having the problem of giving the general accepted standard in order to alleviating such problem.
1.2     OBJECTIVES OF THE STUDY
The study is intended in order to find the following
-    How it recognizes long tired assets and distinguishes between the two types of asset which know as tangible and intangible assets.
-    How to determine the lose of property line plant and equipment.
-   The research and development expenditure.
-   The assets that are classified as tangible and intangible assets.
-   The procedure of accounting for tangible and intangible assets v Internal control over research and development cost.  
1.3     SIGNIFICANCE OF THE STUDY
Sometimes assets brought for research and development is not fully utilized and as such poorly accounted for depreciation or at times disregarded. Therefore this study is important by considering the following steps  
-   Making provision for research and development thereby educating some of the official responsible for such work.
-   Setting out the general accepted accounting standard for research and development activities  
-   Evaluating the procedures adopted by research institute and suggest solution where there is any deviation from the general acceptable standard  
1.4     SCOPE AND LIMITATION OF THE STUDY
The study cover how account for research and development costs is generally accepted in accounting standard. It is limited to some research unit in some institution and organization with special reference the project development institute Enugu (PRODA). Another limitation is duration of research work, the time given to us for the submission of the research work, the short boring in mind that we have to carry out the project in line with our official duties. Furthermore lack of fund also contributed to limited research work under this I observed that more than hundred percent piece of material needed for the project such as fuls cap, sheet, stencils e.t.c is increased. Finally the main obstacle to this research work is lack of information material. Under this enough literature on the choose topic is lacking, even throngs its there the information needed will not be enough for such work. Therefore this posed a lot of problem in our research work.

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