How should research and development costs be accounted for, according to a Financial Accounting Standards Board Statement?
A)Must be capitalized when incurred and then amortized over their estimated useful lives.
B)Must be expensed in the period incurred.
C)May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved.
D)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 Financial Accounting Standards Board 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. Therefore, choice D is the correct answer.

How Should Research and Development Costs Be Accounted For, According