Wiley GAAP 2014: Interpretation and Application of Generally Accepted Accounting Principles

43   ASC 730 RESEARCH AND DEVELOPMENT

Perspective and Issues

Subtopics

Scope and Scope Exception

Overview

Definitions of Terms

Concepts, Rules, and Examples

Overview of Research and Development Costs

Example of research and development

Acquired Research and Development Costs

Nonrefundable advance payments related to future R&D activities

Sponsored research and development activities

PERSPECTIVE AND ISSUES

Subtopics

ASC 730, Research and Development, contains two subtopics:

• ASC 730-10, Overall, which provides guidance on the activities, elements, costs, accounting and disclosures for research and development
• ASC 730-20, Research and Development Arrangements, which provides guidance on arrangements used to finance research and development.

Scope and Scope Exception

ASC 730 applies to all entities and to “activities aimed at developing or significantly improving a product or service (referred to as product) or a process or technique (referred to as process) whether the product or process is intended for sale or use.” (ASC 710-30-15-3)

ASC 730 does not apply to the costs of research and development activities conducted for others under a contractual arrangement, indirect costs, activities that are unique to entities in the extractive industries, a process for use in an entity's selling or administrative activities, routine, market research, research and development assets acquired in an acquisition by not-for-profit entity or business combination,

Overview

ASC 730 addresses the proper ...