State, with reason, how the following expenditure would be categorized to conform with IAS38.
A Wine distillery has successfully designed and tested a new process to make high-quality distilled wine. The trial run of the process has been successful in the Napa Valley which recorded its hottest summer since the record began. The distillery has been spent on $3 million dollars before the trial run on this process. The company has achieved the technical feasibility to complete the new process, and it can complete the project and start using this new process to produce wines. It anticipates spending another $300 on the legal costs and $2000 on the patent application and registration that would be valid for 5 years.