Wiley GAAP 2021, 2nd Edition

45ASC 730 RESEARCH AND DEVELOPMENT

1. Perspective and Issues
   1. Subtopics
   2. Scope and Scope Exception
   3. Overview
2. Definitions of Terms
3. Concepts, Rules, And Examples
   1. ASC 730‐10, Research and Development—Overall
      1. Example of Research and Development
   2. ASC 730‐20, Research and Development Arrangements
      1. Nonrefundable Advance Payments Related to Future R&D Activities
      2. Other Sources

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 alterations to existing products and processes
• Market research
• Research and development assets acquired in an acquisition by not‐for‐profit entity or business combination ...