|
Section 7510: Research and Development
[U.S. GAAP Codification Topic]
730 Research and development
730-10 Overall
[U.S. GAAP before the Codification]
SFAS 2, October 1974, Accounting for Research and Development Costs
1. General rule for research and development costs
Research and development costs are
--> charged to expense when incurred
--> because future economic benefits are uncertain
2. Research and development (R&D) costs
(1) tangible assets
(2) intangible assets
(3) personnel costs
(4) indirect costs
(5) contract costs
(6) computer software costs
3. Tangible assets acquired for R&D activities
(1) If the assets have alternative future uses
--> capitalized as an asset
--> cost of consumption or depreciation is charged to expense
(2) If the assets do not have alternative future uses
--> expensed at the time of acquisition
4. Intangible assets acquired for R&D activities
(1) If the assets have alternative future uses
--> capitalized as an asset
--> amortization is charged to expense
(2) If the assets do not have alternative future uses
--> expensed at the time of acquisition
5. Personnel costs, indirect costs, contract costs
--> expensed when incurred
6. Computer software costs
(1) Software developed internally for R&D activities
--> all costs are expensed when incurred
--> alternative future uses are not considered
--> development phases are not considered
(2) Software purchased for R&D activities
(2a) if the software has alternative future uses
--> capitalize as an intangible asset
--> amortization is charged to expense
(2b) if the software does not have alternative future uses
--> expensed when incurred
|