{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/730/10/#15-scope-and-scope-exceptions","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"730","topic_title":"Research and Development","subtopic":"730-10","subtopic_title":"Overall","section":{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"730-10-15-1","para":"15-1","html":"
The Scope Section of the Overall Subtopic establishes the pervasive scope for all Subtopics of the Research and Development Topic. Unless explicitly addressed within specific Subtopics, the following scope guidance applies to all Subtopics of the Research and Development Topic.
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The guidance in the Research and Development Topic applies to all entities, including the following:
  1. a
    Entities in the extractive industries whose research and development activities are comparable in nature to research and development activities of other entities, such as development or improvement of processes and techniques including those employed in exploration, drilling, and extraction.
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The guidance in the Research and Development Topic applies to the following transactions and activities:
  1. a
    Those 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. A process may be a system whose output is to be sold, leased, or otherwise marketed to others. A process also may be used internally as a part of a manufacturing activity or a service activity where the service itself is marketed.
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The guidance in this Topic does not apply to the following transactions and activities:
  1. a
    Accounting for the costs of research and development activities conducted for others under a contractual arrangement, which is a part of accounting for contracts in general. Indirect costs, including indirect costs that are specifically reimbursable under the terms of a contract, are also excluded from the scope of this Topic.
  2. b
    Activities that are unique to entities in the extractive industries, such as prospecting, acquisition of mineral rights, exploration, drilling, mining, and related mineral development.
  3. c
    The acquisition, development, or improvement of a process by an entity for use in its selling or administrative activities. A process may be intended to achieve cost reductions as opposed to revenue generation. However, (e) specifically excludes market research or market testing activities from research and development activities. Those activities were excluded because they relate to the selling function of an entity. Thus, while in the broadest sense of the word, a process may be used in all of an entity's activities, the acquisition, development, or improvement of a process by an entity for use in its selling or administrative activities shall be excluded from the definition of research and development activities. To the extent, therefore, that the acquisition, development, or improvement of a process by an entity for use in its selling or administrative activities includes costs for computer software, those costs are not research and development costs. Examples of the excluded costs of software are those incurred for development by an airline of a computerized reservation system or for development of a general management information system. See Subtopic 350-40 for guidance related to costs of computer software developed or obtained for internal use and Subtopic 985-20 for computer software intended to be sold, leased, or marketed.
  4. d
    Routine or periodic alterations to existing products, production lines, manufacturing processes, and other ongoing operations even though those alterations may represent improvements.
  5. e
    Market research or market testing activities.
  6. f
    Research and development assets acquired in a business combination, acquired in an acquisition by a not-for-profit entity, or recognized by a joint venture upon formation. If tangible and intangible assets acquired in that manner are used in research and development activities, they are recognized and measured at fair value in accordance with Subtopic 805-20, regardless of whether they have an alternative future use. After recognition, tangible assets acquired in a business combination, acquired in an acquisition by a not-for-profit entity, or recognized by a joint venture upon formation that are used in research and development activities are accounted for in accordance with their nature. After recognition, intangible assets acquired in a business combination, acquired in an acquisition by a not-for-profit entity, or recognized by a joint venture upon formation that are used in research and development activities are accounted for in accordance with Topic 350.
","snippet":"The guidance in this Topic does not apply to the following transactions and activities:\n(a) Accounting for the costs of research and development activities conducted for others under a contractual arrangement, which is a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9b87b5b5cf9b440d45f3444100f4099d1a1053d23cb99129d129a1e8f9344e21","downloaded_from":"2026-09-10T01:14:37.494Z","last_downloaded_at":"2026-09-10T01:14:37.494Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482992","source_sha256":"45ec27cf15eaef415b07a49841a8dd323dcdc0463a86a72037031810f5ea1e79"}},{"citation":"730-10-15-5","para":"15-5","html":"
The guidance in this Topic may or may not apply to the following transactions and activities:
  1. a
    Development of computer software internally for its own use. If development of computer software is undertaken for the entity's own use, the software may be intended, for example, to be used in the research and development activities of the entity or as a part of a newly developed or significantly improved product or process. See Subtopic 350-40 for guidance related to costs of computer software developed or obtained for internal use.
  2. b
    Costs incurred to purchase or lease computer software developed by others are not research and development costs under this Subtopic unless the software is for use in research and development activities. See also paragraph 985-20-25-1.
","snippet":"The guidance in this Topic may or may not apply to the following transactions and activities:\n(a) Development of computer software internally for its own use. If development of computer software is undertaken for the ent…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f05bad210e030e14bfd9dd2cb5f18932a060a23b3e5b3452e542c88154eb087e","downloaded_from":"2026-09-10T01:14:37.494Z","last_downloaded_at":"2026-09-10T01:14:37.494Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482992","source_sha256":"45ec27cf15eaef415b07a49841a8dd323dcdc0463a86a72037031810f5ea1e79"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:02d0101ee36f1d3e8e688ff834772c54633ebfba3cc3b7e79edd09cf445507c0","downloaded_from":"2026-09-10T01:14:37.494Z","last_downloaded_at":"2026-09-10T01:14:37.494Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482992","source_sha256":"45ec27cf15eaef415b07a49841a8dd323dcdc0463a86a72037031810f5ea1e79"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8eed5e9cfa8a819dee033f547b163e05f6df3bb583cf19327ddb683c35c54899","downloaded_from":"2026-09-10T01:14:37.494Z","last_downloaded_at":"2026-09-10T01:14:37.494Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482992","source_sha256":"45ec27cf15eaef415b07a49841a8dd323dcdc0463a86a72037031810f5ea1e79"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8eed5e9cfa8a819dee033f547b163e05f6df3bb583cf19327ddb683c35c54899","downloaded_from":"2026-09-10T01:14:37.494Z","last_downloaded_at":"2026-09-10T01:14:37.494Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482992","source_sha256":"45ec27cf15eaef415b07a49841a8dd323dcdc0463a86a72037031810f5ea1e79"}}