# ASC 730-20-15: Research and Development — Research and Development Arrangements — 15 Scope and Scope Exceptions Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/730/20/#15-scope-and-scope-exceptions) 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): 2026-09-10T01:15:07.621Z to 2026-09-10T01:15:07.621Z Record version: sha256:5fdadc80f57be5d71265c4449786ab27f663250979dfbfeb375f0ef6acbd6d9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 730-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/730/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [730-20-15-1](https://asc.understandingaccounting.org/asc/730/20/#730-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:15:07.621Z to 2026-09-10T01:15:07.621Z Record version: sha256:7894dcd158f43f4d4f48fd8ed3d72e81b1d5d77b1e868a00823d0c63104cb9bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 730-10-15, with specific qualifications and exceptions noted below. ##### [730-20-15-1A](https://asc.understandingaccounting.org/asc/730/20/#730-20-15-1A) Pending content: no Source downloaded (UTC): 2026-09-10T01:15:07.621Z to 2026-09-10T01:15:07.621Z Record version: sha256:47410c5b42fd2d681cc943a5be7d101ad9bf97a6e9b13a2e6a0be26b1b3131aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic also applies to software-development arrangements that are fully or partially funded by a party other than the vendor that is developing the software and for which technological feasibility of the computer software product in accordance with the provisions of Subtopic 985-20 on software has not been established before entering into the arrangement. Those arrangements typically provide the funding party with some or all of the following benefits: 1. a Royalties payable to the funding party based solely on future sales of the product by the software vendor (that is, reverse royalties) 2. b Discounts on future purchases by the funding party of products produced under the arrangement 3. c A nonexclusive sublicense to the funding party, at no additional charge, for the use of any product developed (a prepaid or paid-up nonexclusive sublicense). #### Entities ##### [730-20-15-2](https://asc.understandingaccounting.org/asc/730/20/#730-20-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:15:07.621Z to 2026-09-10T01:15:07.621Z Record version: sha256:a3ccedc9751379b28a220c92fcef9aed2f23c7849c1f0812bd77c7fc15f03ebe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic establishes standards of financial accounting and reporting for an entity that is a party to a [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.") arrangement through which it can obtain the results of research and development funded partially or entirely by others. ##### [730-20-15-3](https://asc.understandingaccounting.org/asc/730/20/#730-20-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:15:07.621Z to 2026-09-10T01:15:07.621Z Record version: sha256:e37eef7ee9f91c0cb361c5835865bf668c296c0a0e4cb57961e1420bd3b2b0bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies whether the research and development is performed by the entity, the funding parties, or a third party. Although the limited-partnership form of arrangement is used for illustrative purposes in this Subtopic, the guidance also applies for other forms. #### Transactions ##### [730-20-15-4](https://asc.understandingaccounting.org/asc/730/20/#730-20-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:15:07.621Z to 2026-09-10T01:15:07.621Z Record version: sha256:f66543373858c09eff40497e1a3acaa83e56e15c3cbe06e77680a4f8663c09dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to the following transactions and activities: 1. a Government-sponsored research and development. 2. b Funded software-development arrangements in which the technological feasibility of the computer software product, in accordance with the provisions of Subtopic 985-20 on software, has been established before the arrangement has been entered into (see paragraph [985-20-25-12](https://asc.understandingaccounting.org/asc/985/20/#985-20-25-12)).