Under GAAP, the usual rule for accounting for research and development expenditures is to
A) Record such expenditures as increases in the research and development asset, which is never amortized
B) Record such expenditures as increases in the research and development asset, which is amortized over five years
C) Record such expenditures as increases in the research and development asset, which is amortized over the expected useful life of the results of the research
D) Expense such expenditures as they are incurred

Question

Quizplus · Accepted Answer

Under GAAP, research and development expenditures are generally expensed as they are incurred, unless certain criteria for capitalization are met. Therefore, option D is the correct choice. Options A, B, and C describe methods of capitalization, which are not the usual rule under GAAP.

Under GAAP, the Usual Rule for Accounting for Research and Development