# ASC 730-10: Research and Development — Overall Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/730/10/) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:14:28.594Z to 2026-09-10T01:14:54.866Z Record version: sha256:88e67d58b017bd5bb9f03259be2453697aa2ac4010a0900309090797f3062bd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-10: Research and Development — Overall ### Machine-generated study aids ```json { "summary": "ASC 730-10 governs the identification and accounting for research and development (R&D) costs. The core rule is that R&D costs within scope are charged to expense when incurred (730-10-25-1), because future benefits are too uncertain and unmeasurable to support asset recognition (730-10-05-2 through 05-3). The subtopic also defines which activities count as R&D, which cost elements are R&D costs, and requires disclosure of total R&D expense for each income statement period.", "key_points": [ "R&D costs within the scope of this Subtopic shall be charged to expense when incurred (730-10-25-1); the immediate recognition principle applies because matching cannot be applied to R&D (730-10-05-3).", "Materials, equipment, facilities, and intangibles purchased from others that have alternative future uses are capitalized, with consumption/depreciation/amortization charged to R&D; if there is no alternative future use, the full cost is R&D expense when incurred (730-10-25-2(a) and (c)).", "R&D costs also include personnel salaries and wages, contract services performed by others on the entity's behalf, and a reasonable allocation of indirect costs, but not general and administrative costs not clearly related to R&D (730-10-25-2(b), (d), (e)).", "The alternative future use test does not apply to internally developed software used in R&D activities — those costs are expensed as incurred (730-10-25-4); purchased or leased software for R&D is expensed unless it has alternative future uses (730-10-25-3).", "Excluded from scope: R&D performed for others under contract, activities unique to extractive industries, processes for selling or administrative use, routine or periodic alterations to existing products, market research or testing, and R&D assets acquired in a business combination, an acquisition by an NFP, or recognized by a joint venture upon formation (730-10-15-4).", "R&D assets acquired in a business combination (or NFP acquisition or JV formation) are recognized and measured at fair value under Subtopic 805-20 regardless of alternative future use, then accounted for by nature (tangible) or under Topic 350 (intangible) (730-10-15-4(f)).", "Total R&D costs charged to expense must be disclosed for each period an income statement is presented, including R&D for computer software products to be sold, leased, or otherwise marketed (730-10-50-1)." ], "categories": [ "Recognition", "Intangibles and goodwill", "Disclosure", "Inventory and PP&E" ], "audience_level": "introductory", "student_note": "The bright-line rule to memorize is immediate expensing, and the most-tested nuance is the \"alternative future use\" test: equipment or purchased intangibles usable elsewhere are capitalized and only the depreciation/amortization is R&D expense. Students commonly miss that this test never applies to internally developed software used in R&D (always expensed) and that IPR&D acquired in a business combination is capitalized at fair value under 805-20 regardless of alternative future use.", "related_topics": [ "730-20", "350-40", "350-50", "985-20", "805-20", "340-10" ], "key_concepts": [ "research and development costs", "expense as incurred", "alternative future use", "indirect cost allocation", "in-process research and development", "internally developed software", "contract r&d services", "pilot plant" ] } ``` Source downloaded (UTC): 2026-09-10T01:14:28.594Z to 2026-09-10T01:14:28.594Z Record version: sha256:9bd5975dc419c28e1feab9115357445b23cb7c9128c25a663496c09db310dbdd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/730/10/#00-status) SEC content: no ##### [730-10-00-1](https://asc.understandingaccounting.org/asc/730/10/#730-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:28.594Z to 2026-09-10T01:14:28.594Z Record version: sha256:d9273cacabc366870f2b4217d77c1ac9f14a3e186634cdcc55f67d986e78c241 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
AcquirerAmendedAccounting Standards Update No. 2025-0305/12/2025
Acquisition by a Not-for-Profit EntityAddedAccounting Standards Update No. 2010-0701/28/2010
BusinessAmendedAccounting Standards Update No. 2017-0101/05/2017
Corporate Joint VentureAddedAccounting Standards Update No. 2023-0508/23/2023
Joint VentureAddedAccounting Standards Update No. 2023-0508/23/2023
Variable Interest EntitySupersededAccounting Standards Update No. 2025-0305/12/2025
730-10-15-4AmendedAccounting Standards Update No. 2023-0508/23/2023
730-10-15-4AmendedAccounting Standards Update No. 2010-0701/28/2010
730-10-25-1AmendedAccounting Standards Update No. 2023-0508/23/2023
730-10-25-1AmendedAccounting Standards Update No. 2010-0701/28/2010
730-10-25-2AmendedAccounting Standards Update No. 2025-0609/18/2025
730-10-25-4AmendedAccounting Standards Update No. 2025-0609/18/2025
730-10-55-1AmendedAccounting Standards Update No. 2012-0410/01/2012
730-10-60-2ASupersededAccounting Standards Update No. 2025-0609/18/2025
730-10-60-5AmendedAccounting Standards Update No. 2014-0905/28/2014
Source downloaded (UTC): 2026-09-10T01:14:31.854Z to 2026-09-10T01:14:31.854Z Record version: sha256:e3d73b3bb6642fea2c4d03651d6ac94a51741cc1ff7d2d2856f2be7aadb4b628 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/730/10/#05-overview-and-background) SEC content: no ##### [730-10-05-1](https://asc.understandingaccounting.org/asc/730/10/#730-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:31.854Z to 2026-09-10T01:14:31.854Z Record version: sha256:98685aad924067ccab721344a51057f80e6471ffb8e967f2e8c9662ec2a095ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Research and Development Topic establishes standards of financial accounting and reporting for [research and development](https://asc.understandingaccounting.org/glossary/r/#research-and-development "Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (referred to as product) or a new process or technique (referred to as process) or in bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation of pilot plants.") costs. The Overall Subtopic specifies: 1. a Those activities that shall be identified as research and development for financial accounting and reporting purposes 2. b The elements of costs that shall be identified with research and development activities 3. c The accounting for research and development costs 4. d The financial statement disclosures related to research and development costs. ##### [730-10-05-2](https://asc.understandingaccounting.org/asc/730/10/#730-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:31.854Z to 2026-09-10T01:14:31.854Z Record version: sha256:1021e847fa2de4bcb0f0c91640b1c4407bb64f496139d045abf66f463cf21167 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the time most research and development costs are incurred, the future benefits are at best uncertain. In other words, there is no indication that an economic resource has been created. Moreover, even if at some point in the progress of an individual research and development project the expectation of future benefits becomes sufficiently high to indicate that an economic resource has been created, the question remains whether that resource should be recognized as an asset for financial accounting purposes. Although future benefits from a particular research and development project may be foreseen, they generally cannot be measured with a reasonable degree of certainty. There is normally little, if any, direct relationship between the amount of current research and development expenditures and the amount of resultant future benefits to the entity. Research and development costs therefore fail to satisfy the suggested measurability test for accounting recognition as an asset. ##### [730-10-05-3](https://asc.understandingaccounting.org/asc/730/10/#730-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:31.854Z to 2026-09-10T01:14:31.854Z Record version: sha256:c755d761548d5f71cfe2df19e1c68fd58f10743a58d49e0355eae225e8d3230b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Also, there is often a high degree of uncertainty about whether research and development expenditures will provide any future benefits. Thus, even an indirect cause and effect relationship can seldom be demonstrated. Because there is generally no direct or even indirect basis for relating costs to revenues, the principles of associating cause and effect and systematic and rational allocation cannot be applied to recognize research and development costs as expenses. That is, the notion of matching, when used to refer to the process of recognizing costs as expenses on any sort of cause and effect basis, cannot be applied to research and development costs. The general lack of discernible future benefits at the time the costs are incurred indicates that the immediate recognition principle of expense recognition should apply. Source downloaded (UTC): 2026-09-10T01:14:35.682Z to 2026-09-10T01:14:35.682Z Record version: sha256:2e72d3127c47d167f0a16d10a36f16260e0cebfaa019f223aa381104321ccfcd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-10-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/730/10/#10-objectives) SEC content: no ##### [730-10-10-1](https://asc.understandingaccounting.org/asc/730/10/#730-10-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:35.682Z to 2026-09-10T01:14:35.682Z Record version: sha256:247791326f060e95f04f19b6cd7c256b93d65da7f6c5ad286bc60b5f4e29a266 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objective of this Subtopic is to provide guidance related to [research and development](https://asc.understandingaccounting.org/glossary/r/#research-and-development "Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (referred to as product) or a new process or technique (referred to as process) or in bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation of pilot plants.") costs. Source downloaded (UTC): 2026-09-10T01:14:37.494Z to 2026-09-10T01:14:37.494Z Record version: sha256:8eed5e9cfa8a819dee033f547b163e05f6df3bb583cf19327ddb683c35c54899 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/730/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [730-10-15-1](https://asc.understandingaccounting.org/asc/730/10/#730-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:37.494Z to 2026-09-10T01:14:37.494Z Record version: sha256:8bc64dc83cfaef123c585cb2d5eaf4aae9716b641c5b508114bc68d519b3d0fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Entities ##### [730-10-15-2](https://asc.understandingaccounting.org/asc/730/10/#730-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:37.494Z to 2026-09-10T01:14:37.494Z Record version: sha256:e4431089f9a7a5bd44d6cb90818a37c3dfdded8f37811c5a1d4e6b91fb8be09d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/r/#research-and-development "Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (referred to as product) or a new process or technique (referred to as process) or in bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation of pilot plants.") 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. #### Transactions ##### [730-10-15-3](https://asc.understandingaccounting.org/asc/730/10/#730-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:37.494Z to 2026-09-10T01:14:37.494Z Record version: sha256:a96072efe03108c70990a72a9b42cc48174f9968634372d17daad240e4ec44a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [730-10-15-4](https://asc.understandingaccounting.org/asc/730/10/#730-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:37.494Z to 2026-09-10T01:14:37.494Z Record version: sha256:9b87b5b5cf9b440d45f3444100f4099d1a1053d23cb99129d129a1e8f9344e21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/a/#acquisition-by-a-not-for-profit-entity "A transaction or other event in which a not-for-profit acquirer obtains control of one or more nonprofit activities or businesses and initially recognizes their assets and liabilities in the acquirer's financial statements. When applicable guidance in Topic 805 is applied by a not-for-profit entity, the term business combination has the same meaning as this term has for a for-profit entity. Likewise, a reference to business combinations in guidance that links to Topic 805 has the same meaning as a reference to acquisitions by not-for-profit entities."), or recognized by a [joint venture](https://asc.understandingaccounting.org/glossary/j/#joint-venture "An entity owned and operated by a small group of businesses (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a joint venture frequently is to share risks and rewards in developing a new market, product, or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a joint venture. The ownership of a joint venture seldom changes, and its equity interests usually are not traded publicly. A minority public ownership, however, does not preclude an entity from being a joint venture. As distinguished from a corporate joint venture, a joint venture is not limited to corporate entities.") 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. ##### [730-10-15-5](https://asc.understandingaccounting.org/asc/730/10/#730-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:37.494Z to 2026-09-10T01:14:37.494Z Record version: sha256:f05bad210e030e14bfd9dd2cb5f18932a060a23b3e5b3452e542c88154eb087e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/985/20/#985-20-25-1). Source downloaded (UTC): 2026-09-10T01:14:44.016Z to 2026-09-10T01:14:44.016Z Record version: sha256:c63629f26d39fed5657181e0cefe0278fdad6e2aa979c46cbc4e81672a88eaeb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-10-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/730/10/#25-recognition) SEC content: no #### Accounting for Research and Development Costs ##### [730-10-25-1](https://asc.understandingaccounting.org/asc/730/10/#730-10-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:44.016Z to 2026-09-10T01:14:44.016Z Record version: sha256:938c6a2fd3534de1e347f501269af5d1d320c6eed82218f3b516af598e78ec7e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Research and development](https://asc.understandingaccounting.org/glossary/r/#research-and-development "Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (referred to as product) or a new process or technique (referred to as process) or in bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation of pilot plants.") costs encompassed by this Subtopic shall be charged to expense when incurred. As noted in paragraph [730-10-15-4(f)](https://asc.understandingaccounting.org/asc/730/10/#730-10-15-4), 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](https://asc.understandingaccounting.org/glossary/a/#acquisition-by-a-not-for-profit-entity "A transaction or other event in which a not-for-profit acquirer obtains control of one or more nonprofit activities or businesses and initially recognizes their assets and liabilities in the acquirer's financial statements. When applicable guidance in Topic 805 is applied by a not-for-profit entity, the term business combination has the same meaning as this term has for a for-profit entity. Likewise, a reference to business combinations in guidance that links to Topic 805 has the same meaning as a reference to acquisitions by not-for-profit entities."), or recognized by a [joint venture](https://asc.understandingaccounting.org/glossary/j/#joint-venture "An entity owned and operated by a small group of businesses (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a joint venture frequently is to share risks and rewards in developing a new market, product, or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a joint venture. The ownership of a joint venture seldom changes, and its equity interests usually are not traded publicly. A minority public ownership, however, does not preclude an entity from being a joint venture. As distinguished from a corporate joint venture, a joint venture is not limited to corporate entities.") upon formation that are used in research and development activities. #### Elements of Costs to Be Identified with Research and Development Activities ##### [730-10-25-2](https://asc.understandingaccounting.org/asc/730/10/#730-10-25-2) Pending content: yes Source downloaded (UTC): 2026-09-10T01:14:44.016Z to 2026-09-10T01:14:44.016Z Record version: sha256:686649af889077c8d6cfcc2ab3dcaa4306474f431c6cc8c89e3c18c94b579227 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-2) 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: [350-40-65-4](https://asc.understandingaccounting.org/asc/350/40/#350-40-65-4)Elements 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](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-2) 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. #### Computer Software ##### [730-10-25-3](https://asc.understandingaccounting.org/asc/730/10/#730-10-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:44.016Z to 2026-09-10T01:14:44.016Z Record version: sha256:0660274dacdab4fb8bf631ea90a7f70f3d80a127b9da72795efa1abdf1d21048 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/730/10/#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). ##### [730-10-25-4](https://asc.understandingaccounting.org/asc/730/10/#730-10-25-4) Pending content: yes Source downloaded (UTC): 2026-09-10T01:14:44.016Z to 2026-09-10T01:14:44.016Z Record version: sha256:e858691eb430cec904e4407a903142ac1a865965996915d792bf9224a4ae6b86 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)](https://asc.understandingaccounting.org/asc/730/10/#730-10-25-2) 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: [350-40-65-4](https://asc.understandingaccounting.org/asc/350/40/#350-40-65-4)Development 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)](https://asc.understandingaccounting.org/asc/730/10/#730-10-25-2) applies only to intangibles purchased from others. Source downloaded (UTC): 2026-09-10T01:14:45.691Z to 2026-09-10T01:14:45.691Z Record version: sha256:fed9cdb4bc5d5bc2f52b44b151dbc2798c05cda8a8a0610352394e7989a6da67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-10-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/730/10/#50-disclosure) SEC content: no ##### [730-10-50-1](https://asc.understandingaccounting.org/asc/730/10/#730-10-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:45.691Z to 2026-09-10T01:14:45.691Z Record version: sha256:6a3a80fd339d7e9fe618e020e9279b221e34ec23da6c01292520a625bbc2bbae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosure shall be made in the financial statements of the total [research and development](https://asc.understandingaccounting.org/glossary/r/#research-and-development "Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (referred to as product) or a new process or technique (referred to as process) or in bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation of pilot plants.") costs charged to expense in each period for which an income statement is presented. Such disclosure shall include research and development costs incurred for a computer software product to be sold, leased, or otherwise marketed. Source downloaded (UTC): 2026-09-10T01:14:48.408Z to 2026-09-10T01:14:48.408Z Record version: sha256:481d3f9ea0ea3497fd63101f04ae7289904833cc791ece46421cc12e14485851 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/730/10/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [730-10-55-1](https://asc.understandingaccounting.org/asc/730/10/#730-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:48.408Z to 2026-09-10T01:14:48.408Z Record version: sha256:6ce13c23a1f3ee0797ce494363161168770fe0dd541a2c07c5b29569b0553589 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following activities typically would be considered [research and development](https://asc.understandingaccounting.org/glossary/r/#research-and-development "Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (referred to as product) or a new process or technique (referred to as process) or in bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation of pilot plants.") within the scope of this Topic (unless conducted for others under a contractual arrangement—see paragraph [730-10-15-4\[a\]](https://asc.understandingaccounting.org/asc/730/10/#730-10-15-4)): 1. a Laboratory research aimed at discovery of new knowledge 2. b Searching for applications of new research findings or other knowledge 3. c Conceptual formulation and design of possible product or process alternatives 4. d Testing in search for or evaluation of product or process alternatives 5. e Modification of the formulation or design of a product or process 6. f Design, construction, and testing of preproduction prototypes and models 7. g Design of tools, jigs, molds, and dies involving new technology 8. h Design, construction, and operation of a pilot plant that is not of a scale economically feasible to the entity for commercial production 9. i Engineering activity required to advance the design of a product to the point that it meets specific functional and economic requirements and is ready for manufacture 10. j Design and development of tools used to facilitate research and development or components of a product or process that are undergoing research and development activities. ##### [730-10-55-2](https://asc.understandingaccounting.org/asc/730/10/#730-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:48.408Z to 2026-09-10T01:14:48.408Z Record version: sha256:967e9e794ae657b5a690bc59a79160e350b992269a3f9124eac4eddfa6166776 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following activities typically would not be considered research and development within the scope of this Topic: 1. a Engineering follow-through in an early phase of commercial production 2. b Quality control during commercial production including routine testing of products 3. c Trouble-shooting in connection with break-downs during commercial production 4. d Routine, ongoing efforts to refine, enrich, or otherwise improve upon the qualities of an existing product 5. e Adaptation of an existing capability to a particular requirement or customer's need as part of a continuing commercial activity 6. f Seasonal or other periodic design changes to existing products 7. g Routine design of tools, jigs, molds, and dies 8. h Activity, including design and construction engineering, related to the construction, relocation, rearrangement, or start-up of facilities or equipment other than the following: 1. 1 Pilot plants (see \[h\] in the preceding paragraph) 2. 2 Facilities or equipment whose sole use is for a particular research and development project (see paragraph [730-10-25-2\[a\]](https://asc.understandingaccounting.org/asc/730/10/#730-10-25-2)). 9. i Legal work in connection with patent applications or litigation, and the sale or licensing of patents. ##### [730-10-55-3](https://asc.understandingaccounting.org/asc/730/10/#730-10-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:48.408Z to 2026-09-10T01:14:48.408Z Record version: sha256:083c795f86ea72c2fd2bb0dabf2c6e5ebfd588e9d71218fb82bd3052ce0b164b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Nonrefundable advance payments for future research and development activities for materials, equipment, facilities, and purchased intangible assets that have an alternative future use (in research and development projects or otherwise) are within the scope of this Subtopic. Subtopic 730-20 provides guidance on accounting for nonrefundable advance payments for goods or services that have the characteristics that will be used or rendered for future research and development activities pursuant to an executory contractual arrangement. Source downloaded (UTC): 2026-09-10T01:14:51.323Z to 2026-09-10T01:14:51.323Z Record version: sha256:5dfc4574c15c4f460c30352ebd6549baf7fe97d63946c14bdadf0bacca173b96 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/730/10/#60-relationships) SEC content: no #### Other Assets and Deferred Costs ##### [730-10-60-1](https://asc.understandingaccounting.org/asc/730/10/#730-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:51.323Z to 2026-09-10T01:14:51.323Z Record version: sha256:625d0bd1fc36d07ebf377ce2bd9c0d4cd5c2a493f3c5b914fef1054d0bc2dd29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance regarding design and development costs for products to be sold under long-term supply arrangements, see Subtopic 340-10. #### Intangibles—Goodwill and Other ##### [730-10-60-2](https://asc.understandingaccounting.org/asc/730/10/#730-10-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:51.323Z to 2026-09-10T01:14:51.323Z Record version: sha256:859a92cca66725830644c47f629e4eb19cc58d68e5758c1af5b2807a2310199d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance related to the costs of internal-use computer software, see Subtopic 350-40. ##### [730-10-60-2A](https://asc.understandingaccounting.org/asc/730/10/#730-10-60-2A) Pending content: yes Source downloaded (UTC): 2026-09-10T01:14:51.323Z to 2026-09-10T01:14:51.323Z Record version: sha256:be37c549df95d74cb88ae527f5cfbb406dbf38b9b828be13b1af08cabe71e25f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance related to website development costs, see Subtopic 350-50. Transition date:(P) December 16, 2027; (N) December 16, 2027Transition guidance: [350-40-65-4](https://asc.understandingaccounting.org/asc/350/40/#350-40-65-4)[Paragraph superseded by Accounting Standards Update No. 2025-06.](https://asc.understandingaccounting.org/updates/asu-2025-06/) ##### [730-10-60-3](https://asc.understandingaccounting.org/asc/730/10/#730-10-60-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:51.323Z to 2026-09-10T01:14:51.323Z Record version: sha256:fb978761dc66ff58de4ebaeb72213f1e7586034a85d72c9a4e27e39e531b48d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Software ##### [730-10-60-4](https://asc.understandingaccounting.org/asc/730/10/#730-10-60-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:51.323Z to 2026-09-10T01:14:51.323Z Record version: sha256:45df3a36784c765d75c57c6b60eb46cb3b5cc39dd1c8784dc9eae4853dc40d8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance regarding costs incurred to establish the technological feasibility of a computer software product to be sold, leased, or otherwise marketed, see paragraph [985-20-25-1](https://asc.understandingaccounting.org/asc/985/20/#985-20-25-1). ##### [730-10-60-5](https://asc.understandingaccounting.org/asc/730/10/#730-10-60-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:14:51.323Z to 2026-09-10T01:14:51.323Z Record version: sha256:70066cfc6d53d41e0a9aa5bdd1f74c70f87f64f2352c571d35bc13a9d2c6892c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance related to a funded software-development arrangement, see paragraphs [730-20-15-1A](https://asc.understandingaccounting.org/asc/730/20/#730-20-15-1A) and [985-20-25-12](https://asc.understandingaccounting.org/asc/985/20/#985-20-25-12).