Under GAAP, spending on internally developed intangible assets is usually expensed. An exception occurs in the case of:
A) Research on life-saving medical drugs
B) Research on computer software that has reached a stage of technological feasibility
C) Advertising on brand awareness
D) Charity expenditures that increase the "goodwill" of surrounding communities toward the company

Question

Quizplus · Accepted Answer

Under GAAP, spending on internally developed intangible assets is usually expensed, except for the costs incurred after the development of computer software reaches the stage of technological feasibility. This is because, at this point, there is a high likelihood that the project will be successful and generate economic benefit in the future, so the costs can be capitalized and amortized over the useful life of the software. Research on life-saving medical drugs or charity expenditures that increase the "goodwill" of surrounding communities toward the company would not be considered intangible assets, and expenses related to advertising on brand awareness would be expensed.

Under GAAP, Spending on Internally Developed Intangible Assets Is Usually