According to a Financial Accounting Standards Board Statement, how are research and development costs accounted for?
A) They must be capitalized when incurred and then amortized over their estimated useful lives.
B) They must be expensed in the period incurred.
C) They may be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved.
D) They must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable.

Question

Quizplus · Accepted Answer

According to FASB Statement No. 2, research and development costs must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable. In these cases, the costs may be capitalized and amortized over their estimated useful lives. However, this exception is very limited and applies only to certain specific circumstances.

According to a Financial Accounting Standards Board Statement, How Are