Under U.S GAAP they state that R&D costs must expensed as incurred. Although for software development, they state that once the technological feasibility has been established, development costs are capitalized. Is this only the case for software development ONLY or can firms under GAAP capitalize Development costs for other products once technology feasibility is established?
Once a product has been developed for internal use OR moved into Inventory for resale the R&D can be capitalized. I think the second option, moving product into inventory, is a likely situation that we could see in a question for the capitalization of R&D costs. Off the top of my head I can’t ring off an example.
read SOP 98-1 brother
dtrynoski, please where did you see this statement “Under U.S GAAP they state that R&D costs must expensed as incurred. Although for software development, they state that once the technological feasibility has been established, development costs are capitalized.”? The fact I know is US GAAP prohibits the capitalization as an asset of almost all reseach and development costs. All such costs must be expensed. See page 214 of CFA Program Curriculum Vol 3 (i.e, FRA) Please clarify. Thanks
Schweser Book 3 page 172.