91Ó°ÊÓ

R&D costs are directly related to the research and development of a company's goods or services and any intellectual property created in the process. R&D costs are often incurred when a firm is looking for and developing new goods or services.

(a) In R&D operations, personnel (labor) expenditures should be expensed as incurred.

(b)Materials and equipment expenditures should be expensed right away unless the goods have other uses in the future. Materials should be documented as inventories and allocated as consumed, and equipment should be capitalized and depreciated as utilized if the assets have alternative future uses.

(c)Indirect R&D expenditures shall be fairly attributed to R&D and expensed (except general and administrative costs, which must be clearly connected to be included).