Research and development costs that result in patents may be capitalized to the extent of the fair value of the patent.

Question

Quizplus · Accepted Answer

Research and development costs are expensed as incurred under U.S. GAAP, except for certain development costs in the software industry or where costs are capitalized as part of tangible assets. The costs directly associated with securing a patent (legal fees, filing fees, etc.) can be capitalized, but not the research and development costs themselves.

Research and Development Costs That Result in Patents May Be