D is corrent. Per ASC Topic 730, R&D costs are charged to expense when incurred. Expenditures for items such as materials, equipment, and purchased intangibles may be capitalized if they have alternative future uses in R&D projects or other areas. The cost of the equipment acquired for use in R&D projects ($1,000,000) is capitalized, but the depreciation ($150,000) on the equipment would be expensed along with the other R&D costs incurred. The equipment has alternative future uses because the word “projects” is plural.
A is incorrect. Per ASC Topic 730, R&D costs are charged to expense when incurred. Expenditures for items such as materials, equipment, and purchased intangibles may be capitalized if they have alternative future uses in R&D projects or other areas. The cost of the equipment acquired for use in R&D projects ($1,000,000) is capitalized, but the depreciation ($150,000) on the equipment would be expensed along with the other R&D costs incurred. The equipment has alternative future uses because the word “projects” is plural.
A is incorrect. Per ASC Topic 730, R&D costs are charged to expense when incurred. Expenditures for items such as materials, equipment, and purchased intangibles may be capitalized if they have alternative future uses in R&D projects or other areas. The cost of the equipment acquired for use in R&D projects ($1,000,000) is capitalized, but the depreciation ($150,000) on the equipment would be expensed along with the other R&D costs incurred. The equipment has alternative future uses because the word “projects” is plural.
A is incorrect. Per ASC Topic 730, R&D costs are charged to expense when incurred. Expenditures for items such as materials, equipment, and purchased intangibles may be capitalized if they have alternative future uses in R&D projects or other areas. The cost of the equipment acquired for use in R&D projects ($1,000,000) is capitalized, but the depreciation ($150,000) on the equipment would be expensed along with the other R&D costs incurred. The equipment has alternative future uses because the word “projects” is plural.
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