Wiley GAAP: Financial Statement Disclosure Manual

45ASC 730 RESEARCH AND DEVELOPMENT

1. Authoritative Literature
   1. Overview
   2. Subtopics
   3. Scope and Scope Exceptions
   4. ASC 730‐10, Research and Development—Overall
   5. ASC 730‐20, Research and Development Arrangements
      1. Nonrefundable Advance Payments Related to Future R&D Activities
2. Practice Alert
3. Presentation and Disclosure Requirements
   1. Presentation
   2. Disclosure
4. Presentation and Disclosure Examples
   1. Example 45.1: Accounting Policy for Research and Development Costs
   2. Example 45.2: Research and Development Costs Accounting Policy and Costs
   3. Example 45.3: Research and Development Incentive Income and Receivable
   4. Example 45.4: Research and Development Costs Increase Due to Acquisition

AUTHORITATIVE LITERATURE

Overview

ASC 730 addresses the proper accounting and reporting for research and development costs.

It identifies:

• Those activities that should be identified as research and development,
• The elements of costs that should be identified with research and development activities, and the accounting for these costs, and
• The financial statement disclosures related to them.

  (ASC 730‐10‐05‐1)

The central issue in regard to research and development costs is that the future benefits related to these expenditures are uncertain. Given this uncertainty, it is generally difficult to justify classifying them as an asset. Generally, entities should charge them to expense as incurred. (ASC 730‐10‐05‐2 and 05‐3)

Subtopics

ASC 730, Research and Development, contains two Subtopics:

• ASC 730‐10, ...