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, regardless of whether an intangible asset is created. Therefore, the entire $200,000 should be recognized as R&D expense.

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