Choice "A" is correct. The research costs associated with an internally developed asset will always be expensed. Assuming a company can reliably measure the costs associated with each component, under IFRS the development costs may be capitalized if all of the following criteria are met:

(1) technological feasibility of completing the asset for use or sale has been achieved;
(2) the entity intends to complete and use or sell the asset;

(3) the entity has the ability to use or sell the asset;

(4) the entity understands how the asset will generate probable future economic benefi ts;
(5) technical, fi nancial, and other resources are available to complete development of the asset;
(6) the entity has the ability to reliably measure the expenditures.

Kriger Corp. has met four of the criteria, with the one issue being that they do not have sufficient resources to complete the development of the patent. Because all five criteria are not met, they cannot capitalize the development costs associated with the patent. For companies operating under U.S. GAAP, all research and development costs are expensed.