Question

R&D expense is treated as an operating expense, not a capital expenditure, unless the R&D assets acquired have an alternative future use. Select one: True False

Answer 1

Answer:  The correct answer is : True

Explanation:  the R&D assets are similar to regular plant assets, under GAAP, R&D costs are expensed unless the R&D assets have alternative future uses. If these assets do, indeed, have alternative future uses, they will be capitalized and depreciated.  R&D expenses exclude any costs related to sales.