A company incurs research and development costs of $200,000 in 2011 of which $50,000 of these costs relate to development activities because certain criteria have been met which suggest that an intangible asset has been created. What amount should be recognized as research and development expense in 2011 using U.S. GAAP?

Question

Quizplus · Accepted Answer

Under U.S. GAAP, all research and development costs are expensed as incurred. Therefore, the entire $200,000 should be recognized as research and development expense in 2011.

A Company Incurs Research and Development Costs of $200,000 in 2011