{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/730/10/#25-recognition","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":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Accounting for Research and Development Costs","paragraphs":[{"citation":"730-10-25-1","para":"25-1","html":"
Research and development costs encompassed by this Subtopic shall be charged to expense when incurred. As noted in paragraph 730-10-15-4(f), this Topic does not apply to tangible and 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.
","snippet":"Research and development costs encompassed by this Subtopic shall be charged to expense when incurred. As noted in paragraph 730-10-15-4(f), this Topic does not apply to tangible and intangible assets acquired in a busin…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:938c6a2fd3534de1e347f501269af5d1d320c6eed82218f3b516af598e78ec7e","downloaded_from":"2026-09-10T01:14:44.016Z","last_downloaded_at":"2026-09-10T01:14:44.016Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482941","source_sha256":"6817a129291cdb2534c14e190d6ba4400ec8df85227eda9eb0c94e14ca8293eb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b2b10ea3a568c9dfff51a7575f68d244f6b5216f809e142ad2df0d4ffe36de75","downloaded_from":"2026-09-10T01:14:44.016Z","last_downloaded_at":"2026-09-10T01:14:44.016Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482941","source_sha256":"6817a129291cdb2534c14e190d6ba4400ec8df85227eda9eb0c94e14ca8293eb"}},{"block":null,"heading":"Elements of Costs to Be Identified with Research and Development Activities","paragraphs":[{"citation":"730-10-25-2","para":"25-2","html":"
Elements of costs shall be identified with research and development activities as follows (see Subtopic 350-50 for guidance related to website development):
  1. a
    Materials, equipment, and facilities. The costs of materials (whether from the entity's normal inventory or acquired specially for research and development activities) and equipment or facilities that are acquired or constructed for research and development activities and that have alternative future uses (in research and development projects or otherwise) shall be capitalized as tangible assets when acquired or constructed. The cost of such materials consumed in research and development activities and the depreciation of such equipment or facilities used in those activities are research and development costs. However, the costs of materials, equipment, or facilities that are acquired or constructed for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) and therefore no separate economic values are research and development costs at the time the costs are incurred. See Topic 360 for guidance related to property, plant, and equipment; the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 for guidance related to impairment and disposal; and paragraphs
    360-10-35-2 through 35-6
    for guidance related to depreciation.
  2. b
    Personnel. Salaries, wages, and other related costs of personnel engaged in research and development activities shall be included in research and development costs.
  3. c
    Intangible assets purchased from others. The costs of intangible assets that are purchased from others for use in research and development activities and that have alternative future uses (in research and development projects or otherwise) shall be accounted for in accordance with Topic 350. The amortization of those intangible assets used in research and development activities is a research and development cost. However, the costs of intangibles that are purchased from others for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) and therefore no separate economic values are research and development costs at the time the costs are incurred.
  4. d
    Contract services. The costs of services performed by others in connection with the research and development activities of an entity, including research and development conducted by others in behalf of the entity, shall be included in research and development costs.
  5. e
    Indirect costs. Research and development costs shall include a reasonable allocation of indirect costs. However, general and administrative costs that are not clearly related to research and development activities shall not be included as research and development costs.
Transition date:(P) December 16, 2027; (N) December 16, 2027Transition guidance:
350-40-65-4Elements of costs shall be identified with research and development activities as follows:
  1. a
    Materials, equipment, and facilities. The costs of materials (whether from the entity's normal inventory or acquired specially for research and development activities) and equipment or facilities that are acquired or constructed for research and development activities and that have alternative future uses (in research and development projects or otherwise) shall be capitalized as tangible assets when acquired or constructed. The cost of such materials consumed in research and development activities and the depreciation of such equipment or facilities used in those activities are research and development costs. However, the costs of materials, equipment, or facilities that are acquired or constructed for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) and therefore no separate economic values are research and development costs at the time the costs are incurred. See Topic 360 for guidance related to property, plant, and equipment; the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 for guidance related to impairment and disposal; and paragraphs
    360-10-35-2 through 35-6
    for guidance related to depreciation.
  2. b
    Personnel. Salaries, wages, and other related costs of personnel engaged in research and development activities shall be included in research and development costs.
  3. c
    Intangible assets purchased from others. The costs of intangible assets that are purchased from others for use in research and development activities and that have alternative future uses (in research and development projects or otherwise) shall be accounted for in accordance with Topic 350. The amortization of those intangible assets used in research and development activities is a research and development cost. However, the costs of intangibles that are purchased from others for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) and therefore no separate economic values are research and development costs at the time the costs are incurred.
  4. d
    Contract services. The costs of services performed by others in connection with the research and development activities of an entity, including research and development conducted by others in behalf of the entity, shall be included in research and development costs.
  5. e
    Indirect costs. Research and development costs shall include a reasonable allocation of indirect costs. However, general and administrative costs that are not clearly related to research and development activities shall not be included as research and development costs.
","snippet":"Elements of costs shall be identified with research and development activities as follows (see Subtopic 350-50 for guidance related to website development):\n(a) Materials, equipment, and facilities. The costs of material…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:686649af889077c8d6cfcc2ab3dcaa4306474f431c6cc8c89e3c18c94b579227","downloaded_from":"2026-09-10T01:14:44.016Z","last_downloaded_at":"2026-09-10T01:14:44.016Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482941","source_sha256":"6817a129291cdb2534c14e190d6ba4400ec8df85227eda9eb0c94e14ca8293eb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d8d93c2a83c6177800098a5d3fa1e1d3b203ef9cd9f8340ed32cb74264998ad8","downloaded_from":"2026-09-10T01:14:44.016Z","last_downloaded_at":"2026-09-10T01:14:44.016Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482941","source_sha256":"6817a129291cdb2534c14e190d6ba4400ec8df85227eda9eb0c94e14ca8293eb"}},{"block":null,"heading":"Computer Software","paragraphs":[{"citation":"730-10-25-3","para":"25-3","html":"
When software for use in research and development activities is purchased or leased, its cost shall be accounted for as specified by (c) in the preceding paragraph and paragraph 730-10-25-1. That is, the cost shall be charged to expense as incurred unless the software has alternative future uses (in research and development or otherwise).
","snippet":"When software for use in research and development activities is purchased or leased, its cost shall be accounted for as specified by (c) in the preceding paragraph and paragraph 730-10-25-1. That is, the cost shall be ch…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0660274dacdab4fb8bf631ea90a7f70f3d80a127b9da72795efa1abdf1d21048","downloaded_from":"2026-09-10T01:14:44.016Z","last_downloaded_at":"2026-09-10T01:14:44.016Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482941","source_sha256":"6817a129291cdb2534c14e190d6ba4400ec8df85227eda9eb0c94e14ca8293eb"}},{"citation":"730-10-25-4","para":"25-4","html":"
Development of software to be used in research and development activities includes costs incurred by an entity in developing computer software internally for use in its research and development activities, are research and development costs and, therefore, shall be charged to expense when incurred. The alternative future use test does not apply to the internal development of computer software; paragraph 730-10-25-2(c) applies only to intangibles purchased from others. This includes costs incurred during all phases of software development because all of those costs are incurred in a research and development activity.
Transition date:(P) December 16, 2027; (N) December 16, 2027Transition guidance:
350-40-65-4Development of software to be used in research and development activities, including costs incurred by an entity in developing computer software internally for use in its research and development activities, are research and development costs and, therefore, shall be charged to expense when incurred. The alternative future use test does not apply to the internal development of computer software; paragraph 730-10-25-2(c) applies only to intangibles purchased from others.
","snippet":"Development of software to be used in research and development activities includes costs incurred by an entity in developing computer software internally for use in its research and development activities, are research a…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e858691eb430cec904e4407a903142ac1a865965996915d792bf9224a4ae6b86","downloaded_from":"2026-09-10T01:14:44.016Z","last_downloaded_at":"2026-09-10T01:14:44.016Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482941","source_sha256":"6817a129291cdb2534c14e190d6ba4400ec8df85227eda9eb0c94e14ca8293eb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d5d8449797d6960274911849a79a1fd3e13b245fccabdcb4a41b319027ad2c5c","downloaded_from":"2026-09-10T01:14:44.016Z","last_downloaded_at":"2026-09-10T01:14:44.016Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482941","source_sha256":"6817a129291cdb2534c14e190d6ba4400ec8df85227eda9eb0c94e14ca8293eb"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c63629f26d39fed5657181e0cefe0278fdad6e2aa979c46cbc4e81672a88eaeb","downloaded_from":"2026-09-10T01:14:44.016Z","last_downloaded_at":"2026-09-10T01:14:44.016Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482941","source_sha256":"6817a129291cdb2534c14e190d6ba4400ec8df85227eda9eb0c94e14ca8293eb"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c63629f26d39fed5657181e0cefe0278fdad6e2aa979c46cbc4e81672a88eaeb","downloaded_from":"2026-09-10T01:14:44.016Z","last_downloaded_at":"2026-09-10T01:14:44.016Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482941","source_sha256":"6817a129291cdb2534c14e190d6ba4400ec8df85227eda9eb0c94e14ca8293eb"}}