{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/730/","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.","number":"730","title":"Research and Development","area":"Expenses","group":null,"subtopics":[{"number":"730-10","topic":"730","title":"Overall","area":"Expenses","paragraphs":24,"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.","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"],"categories":["Recognition","Intangibles and goodwill","Disclosure","Inventory and PP&E"],"level":"introductory","topic_title":"Research and Development","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-10-00-1","para":"00-1","html":"
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
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The Research and Development Topic establishes standards of financial accounting and reporting for research and development 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.
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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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1021e847fa2de4bcb0f0c91640b1c4407bb64f496139d045abf66f463cf21167","downloaded_from":"2026-09-10T01:14:31.854Z","last_downloaded_at":"2026-09-10T01:14:31.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483044","source_sha256":"0ed6fb34659486755e43f8648f1b9225b5adc3b55a1466ec381269b73f5cfdb7"}},{"citation":"730-10-05-3","para":"05-3","html":"
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.
","snippet":"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. Bec…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c755d761548d5f71cfe2df19e1c68fd58f10743a58d49e0355eae225e8d3230b","downloaded_from":"2026-09-10T01:14:31.854Z","last_downloaded_at":"2026-09-10T01:14:31.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483044","source_sha256":"0ed6fb34659486755e43f8648f1b9225b5adc3b55a1466ec381269b73f5cfdb7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:43b0c04ea353bf755d5515eeb05e9efc12d0958af948c56db8949bfffd02c869","downloaded_from":"2026-09-10T01:14:31.854Z","last_downloaded_at":"2026-09-10T01:14:31.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483044","source_sha256":"0ed6fb34659486755e43f8648f1b9225b5adc3b55a1466ec381269b73f5cfdb7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e3d73b3bb6642fea2c4d03651d6ac94a51741cc1ff7d2d2856f2be7aadb4b628","downloaded_from":"2026-09-10T01:14:31.854Z","last_downloaded_at":"2026-09-10T01:14:31.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483044","source_sha256":"0ed6fb34659486755e43f8648f1b9225b5adc3b55a1466ec381269b73f5cfdb7"}},{"number":"10","label":"10 Objectives","anchor":"10-objectives","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-10-10-1","para":"10-1","html":"
The objective of this Subtopic is to provide guidance related to research and development costs.
","snippet":"The objective of this Subtopic is to provide guidance related to research and development costs.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:247791326f060e95f04f19b6cd7c256b93d65da7f6c5ad286bc60b5f4e29a266","downloaded_from":"2026-09-10T01:14:35.682Z","last_downloaded_at":"2026-09-10T01:14:35.682Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483018","source_sha256":"32b6fc819fce5502646c4fc522d004700163670d05ab85d18e8ad8d3e41be960"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3b92e62b2d15ade78bf6dae8d2152dbb67c1d662378764e766def8eaf3b59cdd","downloaded_from":"2026-09-10T01:14:35.682Z","last_downloaded_at":"2026-09-10T01:14:35.682Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483018","source_sha256":"32b6fc819fce5502646c4fc522d004700163670d05ab85d18e8ad8d3e41be960"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2e72d3127c47d167f0a16d10a36f16260e0cebfaa019f223aa381104321ccfcd","downloaded_from":"2026-09-10T01:14:35.682Z","last_downloaded_at":"2026-09-10T01:14:35.682Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483018","source_sha256":"32b6fc819fce5502646c4fc522d004700163670d05ab85d18e8ad8d3e41be960"}},{"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.
","snippet":"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 appli…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8bc64dc83cfaef123c585cb2d5eaf4aae9716b641c5b508114bc68d519b3d0fb","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":"sha256:23e097757e56066bc699117b0d8e405ac3f36eea30431983b4c99d9141e04f3e","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"}},{"block":null,"heading":"Entities","paragraphs":[{"citation":"730-10-15-2","para":"15-2","html":"
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.
","snippet":"The guidance in the Research and Development Topic applies to all entities, including the following:\n(a) Entities in the extractive industries whose research and development activities are comparable in nature to researc…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4431089f9a7a5bd44d6cb90818a37c3dfdded8f37811c5a1d4e6b91fb8be09d","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":"sha256:275cb593593ce5103706f70617c30d301ecf4bd281ffe472e1dc6d6a43098218","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"}},{"block":null,"heading":"Transactions","paragraphs":[{"citation":"730-10-15-3","para":"15-3","html":"
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.
","snippet":"The guidance in the Research and Development Topic applies to the following transactions and activities:\n(a) Those activities aimed at developing or significantly improving a product or service (referred to as product) o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a96072efe03108c70990a72a9b42cc48174f9968634372d17daad240e4ec44a8","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":"730-10-15-4","para":"15-4","html":"
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"}},{"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"}},{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-10-50-1","para":"50-1","html":"
Disclosure shall be made in the financial statements of the total research and development 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.
","snippet":"Disclosure shall be made in the financial statements of the total research and development costs charged to expense in each period for which an income statement is presented. Such disclosure shall include research and de…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6a3a80fd339d7e9fe618e020e9279b221e34ec23da6c01292520a625bbc2bbae","downloaded_from":"2026-09-10T01:14:45.691Z","last_downloaded_at":"2026-09-10T01:14:45.691Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482916","source_sha256":"3fe43052443fc5d620903260dd9972a031ba0d47a5c37e17a4199e14a699d5e9"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:831b5188b9d5d94e9f5ea58cb7be8559759a4d566f9fadaff35d6f2324d7976d","downloaded_from":"2026-09-10T01:14:45.691Z","last_downloaded_at":"2026-09-10T01:14:45.691Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482916","source_sha256":"3fe43052443fc5d620903260dd9972a031ba0d47a5c37e17a4199e14a699d5e9"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fed9cdb4bc5d5bc2f52b44b151dbc2798c05cda8a8a0610352394e7989a6da67","downloaded_from":"2026-09-10T01:14:45.691Z","last_downloaded_at":"2026-09-10T01:14:45.691Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482916","source_sha256":"3fe43052443fc5d620903260dd9972a031ba0d47a5c37e17a4199e14a699d5e9"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Implementation Guidance","paragraphs":[{"citation":"730-10-55-1","para":"55-1","html":"
The following activities typically would be considered research and development within the scope of this Topic (unless conducted for others under a contractual arrangement—see paragraph 730-10-15-4[a]):
  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.
","snippet":"The following activities typically would be considered research and development within the scope of this Topic (unless conducted for others under a contractual arrangement—see paragraph 730-10-15-4[a]):\n(a) Laboratory re…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ce13c23a1f3ee0797ce494363161168770fe0dd541a2c07c5b29569b0553589","downloaded_from":"2026-09-10T01:14:48.408Z","last_downloaded_at":"2026-09-10T01:14:48.408Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483094","source_sha256":"29e8cad5863846c6c0c2de6aeebf7f0d55b9623028bf4d5993c6cfc79d936194"}},{"citation":"730-10-55-2","para":"55-2","html":"
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]).
  9. i
    Legal work in connection with patent applications or litigation, and the sale or licensing of patents.
","snippet":"The following activities typically would not be considered research and development within the scope of this Topic:\n(a) Engineering follow-through in an early phase of commercial production\n(b) Quality control during com…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:967e9e794ae657b5a690bc59a79160e350b992269a3f9124eac4eddfa6166776","downloaded_from":"2026-09-10T01:14:48.408Z","last_downloaded_at":"2026-09-10T01:14:48.408Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483094","source_sha256":"29e8cad5863846c6c0c2de6aeebf7f0d55b9623028bf4d5993c6cfc79d936194"}},{"citation":"730-10-55-3","para":"55-3","html":"
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.
","snippet":"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 project…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:083c795f86ea72c2fd2bb0dabf2c6e5ebfd588e9d71218fb82bd3052ce0b164b","downloaded_from":"2026-09-10T01:14:48.408Z","last_downloaded_at":"2026-09-10T01:14:48.408Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483094","source_sha256":"29e8cad5863846c6c0c2de6aeebf7f0d55b9623028bf4d5993c6cfc79d936194"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9a22f0091e72ac434915b03ffce51cc79e2b48ba30f917977e8174bfceec8b9e","downloaded_from":"2026-09-10T01:14:48.408Z","last_downloaded_at":"2026-09-10T01:14:48.408Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483094","source_sha256":"29e8cad5863846c6c0c2de6aeebf7f0d55b9623028bf4d5993c6cfc79d936194"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:481d3f9ea0ea3497fd63101f04ae7289904833cc791ece46421cc12e14485851","downloaded_from":"2026-09-10T01:14:48.408Z","last_downloaded_at":"2026-09-10T01:14:48.408Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483094","source_sha256":"29e8cad5863846c6c0c2de6aeebf7f0d55b9623028bf4d5993c6cfc79d936194"}},{"number":"60","label":"60 Relationships","anchor":"60-relationships","is_sec":false,"groups":[{"block":null,"heading":"Other Assets and Deferred Costs","paragraphs":[{"citation":"730-10-60-1","para":"60-1","html":"
For guidance regarding design and development costs for products to be sold under long-term supply arrangements, see Subtopic 340-10.
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For guidance related to the costs of internal-use computer software, see Subtopic 350-40.
","snippet":"For guidance related to the costs of internal-use computer software, see Subtopic 350-40.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:859a92cca66725830644c47f629e4eb19cc58d68e5758c1af5b2807a2310199d","downloaded_from":"2026-09-10T01:14:51.323Z","last_downloaded_at":"2026-09-10T01:14:51.323Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483067","source_sha256":"e853f4a3b88338bfe0dc7961f3ffbc9c1be908bade10b740dd8654c258e46ae6"}},{"citation":"730-10-60-2A","para":"60-2A","html":"
For guidance related to website development costs, see Subtopic 350-50.
Transition date:(P) December 16, 2027; (N) December 16, 2027Transition guidance:
350-40-65-4Paragraph superseded by Accounting Standards Update No. 2025-06.
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Paragraph not used.
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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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:45df3a36784c765d75c57c6b60eb46cb3b5cc39dd1c8784dc9eae4853dc40d8d","downloaded_from":"2026-09-10T01:14:51.323Z","last_downloaded_at":"2026-09-10T01:14:51.323Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483067","source_sha256":"e853f4a3b88338bfe0dc7961f3ffbc9c1be908bade10b740dd8654c258e46ae6"}},{"citation":"730-10-60-5","para":"60-5","html":"
For guidance related to a funded software-development arrangement, see paragraphs 730-20-15-1A and 985-20-25-12.
","snippet":"For guidance related to a funded software-development arrangement, see paragraphs 730-20-15-1A and 985-20-25-12.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:70066cfc6d53d41e0a9aa5bdd1f74c70f87f64f2352c571d35bc13a9d2c6892c","downloaded_from":"2026-09-10T01:14:51.323Z","last_downloaded_at":"2026-09-10T01:14:51.323Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483067","source_sha256":"e853f4a3b88338bfe0dc7961f3ffbc9c1be908bade10b740dd8654c258e46ae6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:822d72529d18ace5feda2ac054402c0ef140ba3f0f64dd58e99fac2ffd614d31","downloaded_from":"2026-09-10T01:14:51.323Z","last_downloaded_at":"2026-09-10T01:14:51.323Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483067","source_sha256":"e853f4a3b88338bfe0dc7961f3ffbc9c1be908bade10b740dd8654c258e46ae6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5dfc4574c15c4f460c30352ebd6549baf7fe97d63946c14bdadf0bacca173b96","downloaded_from":"2026-09-10T01:14:51.323Z","last_downloaded_at":"2026-09-10T01:14:51.323Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483067","source_sha256":"e853f4a3b88338bfe0dc7961f3ffbc9c1be908bade10b740dd8654c258e46ae6"}}],"enrichment":{"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"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:05e1f4b02bce10076d951680b970a7839e71378c7f736701441b908d3b14d7fb","downloaded_from":"2026-09-10T01:14:28.594Z","last_downloaded_at":"2026-09-10T01:14:54.866Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"985-20","title":"Costs of Software to Be Sold, Leased, or Marketed","topic_title":"Software","score":0.8357,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:af0aa4dad0c6440c056894184f66db8bcee49160c2937dd92865aa05283226dd","downloaded_from":"2026-09-10T02:28:26.033Z","last_downloaded_at":"2026-09-10T02:28:54.478Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"350-40","title":"Internal-Use Software","topic_title":"Intangibles—Goodwill and Other","score":0.8152,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4e7b018707987557598f79d578c4f1d8858fef3a7a009cb8422201d519f2a78c","downloaded_from":"2026-09-10T00:02:14.508Z","last_downloaded_at":"2026-09-10T00:02:45.249Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"730-985","title":"Software","topic_title":"Research and Development","score":0.772,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b8badbf642f6d99513be1f32153c6082034fd317f44a5311a7048a68fa66ef8d","downloaded_from":"2026-09-10T01:16:06.499Z","last_downloaded_at":"2026-09-10T01:16:08.583Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"720-45","title":"Business and Technology Reengineering","topic_title":"Other Expenses","score":0.7674,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:15fe9beaddb85d0156629dc0ba71622d9ed4133509283c0290ec576df0f239f1","downloaded_from":"2026-09-10T01:08:49.463Z","last_downloaded_at":"2026-09-10T01:09:03.528Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"730-912","title":"Contractors—Federal Government","topic_title":"Research and 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established by retrieval timestamps"}}],"prev":{"number":"720-978","title":"Real Estate—Time-Sharing Activities","topic_title":"Other Expenses","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5d3bfde625006a1adc0488c617184a96fe948c4052f256990a6d2d9b5af36dec","downloaded_from":"2026-09-10T01:14:14.996Z","last_downloaded_at":"2026-09-10T01:14:26.123Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"730-20","title":"Research and Development Arrangements","topic_title":"Research and Development","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:58f74cacda2b65244a422d577d3b4554534c3e1f880b44a539ed1b1bbac83bd1","downloaded_from":"2026-09-10T01:14:58.781Z","last_downloaded_at":"2026-09-10T01:15:40.514Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:88e67d58b017bd5bb9f03259be2453697aa2ac4010a0900309090797f3062bd1","downloaded_from":"2026-09-10T01:14:28.594Z","last_downloaded_at":"2026-09-10T01:14:54.866Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"730-20","topic":"730","title":"Research and Development Arrangements","area":"Expenses","paragraphs":42,"summary":"ASC 730-20 governs how an entity accounts for arrangements in which other parties (often a limited partnership of investors) fund the entity's research and development. The central question is the substance of the entity's obligation: whether the entity has merely contracted to perform R&D services for others, or has in substance incurred a liability to repay the funding parties. Substance governs over form, so payments labeled royalties or option/purchase prices may in fact be settlement of a borrowing, the purchase price of an asset, or true royalties.","concepts":["research and development arrangement","funded research and development","limited partnership funding vehicle","substance over form","obligation to repay funding parties","contract to perform research and development for others","option to purchase results of r&d","royalty and purchase provisions"],"categories":["Recognition","Disclosure","Contingencies and guarantees","Consolidation"],"level":"intermediate","topic_title":"Research and Development","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-20-00-1","para":"00-1","html":"
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
Variable Interest EntitySupersededAccounting Standards Update No. 2025-0305/12/2025
730-20-05-8AmendedMaintenance Update 2014-07 (PDF)03/17/2014
730-20-15-1AAddedAccounting Standards Update No. 2014-0905/28/2014
730-20-15-4AmendedAccounting Standards Update No. 2014-0905/28/2014
730-20-25-9AmendedAccounting Standards Update No. 2010-0701/28/2010
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nAcquirer | Amended | Accounting Standards Update No. 2025-03 | 05/12/2025 |\nAcquisition …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d6763f0c0ab5a02d0dd1eaca20a9a2de65a338f87302996c4805b552805488c2","downloaded_from":"2026-09-10T01:14:58.781Z","last_downloaded_at":"2026-09-10T01:14:58.781Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483019","source_sha256":"233687ca31b63b56dc9ef5fddca58bfdd6f63d06cd775b978417360173fc0875"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ab080b42a1dd7936cd6aba5ce014cbbd1ec916e3461fc386c093fd75cf0e3ae4","downloaded_from":"2026-09-10T01:14:58.781Z","last_downloaded_at":"2026-09-10T01:14:58.781Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483019","source_sha256":"233687ca31b63b56dc9ef5fddca58bfdd6f63d06cd775b978417360173fc0875"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bf6d955ceb9b4ee1bcb79dc0d79c1c3bcd3d36bd5f87c4740af867039407b33c","downloaded_from":"2026-09-10T01:14:58.781Z","last_downloaded_at":"2026-09-10T01:14:58.781Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483019","source_sha256":"233687ca31b63b56dc9ef5fddca58bfdd6f63d06cd775b978417360173fc0875"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-20-05-1","para":"05-1","html":"
This Subtopic provides guidance on research and development arrangements. Research and development arrangements have been used to finance the research and development of a variety of new products, such as information processing systems, medical technology, experimental drugs, electronic devices, and aerospace equipment. Entities may enter into arrangements for any of the following reasons:
  1. a
    To transfer all or part of the uncertainty and risk involved with the research and development to others
  2. b
    To obtain the benefit of funds that are made available because of tax incentives for investors
  3. c
    To attract qualified research and development personnel who otherwise might be concerned that funding might not be assured
  4. d
    To avoid expanding the ownership of the entity and the impact on earnings per share (EPS) that would result from issuing equity securities
  5. e
    To avoid debt service expenditures and the impact on the entity's debt-to-equity ratio that would result from issuing debt securities
  6. f
    To avoid the impact on the entity's near-term earnings that would result if it incurred the related research and development expenses.
","snippet":"This Subtopic provides guidance on research and development arrangements. Research and development arrangements have been used to finance the research and development of a variety of new products, such as information pro…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:66d22d5024d661bf2f12a9057145e670d6658703e175f3b969d8a9fa775c8751","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-2","para":"05-2","html":"
Many arrangements are formed as limited partnerships. In some, the entity or a related party is the general partner who manages the research and development activities. Sometimes, the limited partners are related to the entity. In some arrangements, the entity has the basic technology needed for the research and development and has performed preliminary research and development work to determine the attractiveness of further work. The entity might contribute the preliminary research and development work and basic technology to the partnership for a minor equity interest or might license or give the rights to the preliminary work and basic technology to the partnership.
","snippet":"Many arrangements are formed as limited partnerships. In some, the entity or a related party is the general partner who manages the research and development activities. Sometimes, the limited partners are related to the …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0c1e77cfa7015f74de4153b8bfe0312b514356e51e73834ac8d421a145311c6d","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-3","para":"05-3","html":"
The terms of the arrangement usually contemplate, but do not guarantee, that the funds provided by the limited partners will be sufficient to complete the intended research and development. However, some agreements permit or require the general partner to sell additional limited-partnership interests or to use its own funds if the funds provided are insufficient to complete the research and development effort. The entity sometimes provides additional funds through loans or advances to the partnership. Repayment of the loans or advances sometimes is guaranteed by the partnership although repayment sometimes is contingent on realization of future economic benefits of the research and development; for example, repayment might be made through offsets against the purchase price for the results of the project or against royalty payments.
","snippet":"The terms of the arrangement usually contemplate, but do not guarantee, that the funds provided by the limited partners will be sufficient to complete the intended research and development. However, some agreements permi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:78be32e92bf2c971fe53fded31e007716b67e5bca8d49aa61bdbca4f26280646","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-4","para":"05-4","html":"
The entity or a related party of the entity usually performs the research and development work under a contract with the partnership. The compensation under the research and development contract usually is either a fixed fee or reimbursement of direct costs plus a fixed fee or fixed percentage of those costs. The work is performed on a best-efforts basis with no guarantee of either technological or commercial success. The partnership retains legal ownership of the results of the research and development and sometimes retains legal rights to the basic technology provided by the entity.
","snippet":"The entity or a related party of the entity usually performs the research and development work under a contract with the partnership. The compensation under the research and development contract usually is either a fixed…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1278d58e1c7c561c2d453f1ed8d6084c41576f6247fe45992059c0cb2b9013f5","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-5","para":"05-5","html":"
Either as part of the partnership agreement or through contracts with the partnership, the entity usually has an option either to purchase the partnership's interest in or to obtain the exclusive rights to the entire results of the research and development in return for a lump sum payment or royalty payments to the partnership. Some arrangements contain a provision that permits the entity to acquire complete ownership of the results for a specified amount of the entity's stock or cash at some future time. In some of those purchase agreements, the partnership has the option to receive either the entity's stock or cash; in others, the entity makes the decision. Sometimes, warrants or similar instruments to purchase the entity's stock are issued in connection with the arrangement.
","snippet":"Either as part of the partnership agreement or through contracts with the partnership, the entity usually has an option either to purchase the partnership's interest in or to obtain the exclusive rights to the entire res…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:05a664abb424684abccfc2d2c2556e8cc9fb7c5bc415d861f93fed8b0ee45ca7","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-6","para":"05-6","html":"
An entity that is a party to an arrangement through which research and development is funded by other parties usually incurs an obligation when it enters into the arrangement. The nature and extent of the entity's obligation are sometimes difficult to determine and can range from an obligation to perform contract research and development work to an obligation to repay the other parties, with a return, for the funds provided.
","snippet":"An entity that is a party to an arrangement through which research and development is funded by other parties usually incurs an obligation when it enters into the arrangement. The nature and extent of the entity's obliga…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0193fe590930fb7f4b113326e577e8c76d9470383f4909c9d58413655ac4b5d5","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-7","para":"05-7","html":"
If the results of the research and development are determined to have sufficient future economic benefit, the entity probably will exercise its option either to purchase the partnership's interests in or to obtain the exclusive rights to the entire results. If the results do not have future economic benefit, the entity usually is not legally required to exercise its option; however, there may be valid business reasons for the entity to acquire the results even though the original objectives of the research and development are not met. For example, the entity may want to obtain ownership of results that have value to the entity even though they do not meet the original objectives.
","snippet":"If the results of the research and development are determined to have sufficient future economic benefit, the entity probably will exercise its option either to purchase the partnership's interests in or to obtain the ex…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:73d2239c0996a31607732035ce35734be6302970765a5b8813328a8bba4109aa","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-8","para":"05-8","html":"
Other reasons to acquire the results of research and development may be:
  1. a
    To maintain the ability to enter into another arrangement with the same parties or similar arrangements with other parties
  2. b
    To recover the ownership of or rights to the entity's basic technology or to prevent the partnership from providing that technology to others
  3. c
    To avoid any potential future claim against the use of the results
  4. d
    To fulfill a moral obligation (for example, the entity is the general partner and due to a conflict of interest feels compelled to exercise its option).
","snippet":"Other reasons to acquire the results of research and development may be:\n(a) To maintain the ability to enter into another arrangement with the same parties or similar arrangements with other parties\n(b) To recover the o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:16139cc8000199f0ba8e773077ca1f0091dd3fbed22a90d70a07f19f93d98e29","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-9","para":"05-9","html":"
Although the entity's legal liabilities will be specified in the various contracts and agreements under the arrangement, accounting representations should not necessarily be limited to legal requirements. Depending on the facts and circumstances involved in a particular research and development arrangement, future payments by the entity to the other parties ostensibly for royalties or to purchase the partnership's interests in or to obtain the exclusive rights to the research and development results might actually be any of the following:
  1. a
    The settlement of a borrowing
  2. b
    The purchase price of an asset
  3. c
    The royalties for the use of an asset.
The financial reporting of an entity that is a party to a research and development arrangement should represent faithfully what it purports to represent and should not subordinate substance to form.
","snippet":"Although the entity's legal liabilities will be specified in the various contracts and agreements under the arrangement, accounting representations should not necessarily be limited to legal requirements. Depending on th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:09ea55200e469a5033239877417df330c13036a0828cbed9754df31685b760c4","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-10","para":"05-10","html":"
The legal structure of a research and development arrangement may take a variety of forms and often is influenced by federal and state income tax and securities regulations. An entity might have an equity interest in the arrangement, or its legal involvement might be only contractual (for example, a contract to provide services and an option to acquire the results of the research and development).
","snippet":"The legal structure of a research and development arrangement may take a variety of forms and often is influenced by federal and state income tax and securities regulations. An entity might have an equity interest in the…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2c1d373670c1d868d6bdc5704296f68e8ed60099584a40add4806d069080dd2c","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"citation":"730-20-05-11","para":"05-11","html":"
For guidance on consolidation of a research and development arrangement, see Subtopic 810-30. An overview can be found in Section 810-30-05.
","snippet":"For guidance on consolidation of a research and development arrangement, see Subtopic 810-30. An overview can be found in Section 810-30-05.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:492aa9030ab1855f13a9c2f2466f54761142ebcc7a942adda3ffebffe5eb0537","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f082b49a528ee67510e7ad578b9467a7250009f5d908f3f7c11b019cc0f64bf3","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dad08fda6df2e5b5f94fff358fed8baf163477d7961a2758630917a59fc18668","downloaded_from":"2026-09-10T01:15:00.952Z","last_downloaded_at":"2026-09-10T01:15:00.952Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482994","source_sha256":"a9fa308c6c38313770fbe5c04275ffc066de762563e85ee2b0f47cc0c1097dc8"}},{"number":"10","label":"10 Objectives","anchor":"10-objectives","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-20-10-1","para":"10-1","html":"
The objective of this Subtopic is to provide guidance related to research and development arrangements.
","snippet":"The objective of this Subtopic is to provide guidance related to research and development arrangements.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1528352fec4453720346ca8babcd37eddaafb999df4aee14d069f84c7a571f94","downloaded_from":"2026-09-10T01:15:04.628Z","last_downloaded_at":"2026-09-10T01:15:04.628Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482968","source_sha256":"c2b221250adf2b05f0887506463bdade871b1b9fd64ae644e0fd08df21c97e6b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b401fd3cf4325167439941b5c1463976993442eab63b7a6d195de65a5b574f5d","downloaded_from":"2026-09-10T01:15:04.628Z","last_downloaded_at":"2026-09-10T01:15:04.628Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482968","source_sha256":"c2b221250adf2b05f0887506463bdade871b1b9fd64ae644e0fd08df21c97e6b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5105bdc6d06598dde975a05974965d592223933a3bf9554a276e052b40839b2f","downloaded_from":"2026-09-10T01:15:04.628Z","last_downloaded_at":"2026-09-10T01:15:04.628Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482968","source_sha256":"c2b221250adf2b05f0887506463bdade871b1b9fd64ae644e0fd08df21c97e6b"}},{"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":"730-20-15-1","para":"15-1","html":"
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.
","snippet":"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.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7894dcd158f43f4d4f48fd8ed3d72e81b1d5d77b1e868a00823d0c63104cb9bc","downloaded_from":"2026-09-10T01:15:07.621Z","last_downloaded_at":"2026-09-10T01:15:07.621Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482946","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-15-1A","para":"15-1A","html":"
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).
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:47410c5b42fd2d681cc943a5be7d101ad9bf97a6e9b13a2e6a0be26b1b3131aa","downloaded_from":"2026-09-10T01:15:07.621Z","last_downloaded_at":"2026-09-10T01:15:07.621Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482946","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aba4e6a584f7612019beada9c7eecf2cabb897c355b19cb8ed9f37c1521d1ac2","downloaded_from":"2026-09-10T01:15:07.621Z","last_downloaded_at":"2026-09-10T01:15:07.621Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482946","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"block":null,"heading":"Entities","paragraphs":[{"citation":"730-20-15-2","para":"15-2","html":"
This Subtopic establishes standards of financial accounting and reporting for an entity that is a party to a research and development arrangement through which it can obtain the results of research and development funded partially or entirely by others.
","snippet":"This Subtopic establishes standards of financial accounting and reporting for an entity that is a party to a research and development arrangement through which it can obtain the results of research and development funded…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a3ccedc9751379b28a220c92fcef9aed2f23c7849c1f0812bd77c7fc15f03ebe","downloaded_from":"2026-09-10T01:15:07.621Z","last_downloaded_at":"2026-09-10T01:15:07.621Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482946","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-15-3","para":"15-3","html":"
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.
","snippet":"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 …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e37eef7ee9f91c0cb361c5835865bf668c296c0a0e4cb57961e1420bd3b2b0bb","downloaded_from":"2026-09-10T01:15:07.621Z","last_downloaded_at":"2026-09-10T01:15:07.621Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482946","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fbf6b43c339973e76c7f4744d1f4c6d1686693176e66b3d1b9ab803e7d8809a8","downloaded_from":"2026-09-10T01:15:07.621Z","last_downloaded_at":"2026-09-10T01:15:07.621Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482946","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"block":null,"heading":"Transactions","paragraphs":[{"citation":"730-20-15-4","para":"15-4","html":"
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).
","snippet":"The guidance in this Subtopic does not apply to the following transactions and activities:\n(a) Government-sponsored research and development.\n(b) Funded software-development arrangements in which the technological feasib…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f66543373858c09eff40497e1a3acaa83e56e15c3cbe06e77680a4f8663c09dd","downloaded_from":"2026-09-10T01:15:07.621Z","last_downloaded_at":"2026-09-10T01:15:07.621Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482946","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:73b7dfd9dd2c1c14b329e666546b4afd535c8abe72c9a6edf3410d74b831ee4f","downloaded_from":"2026-09-10T01:15:07.621Z","last_downloaded_at":"2026-09-10T01:15:07.621Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482946","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5fdadc80f57be5d71265c4449786ab27f663250979dfbfeb375f0ef6acbd6d9e","downloaded_from":"2026-09-10T01:15:07.621Z","last_downloaded_at":"2026-09-10T01:15:07.621Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482946","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-20-25-1","para":"25-1","html":"
This Subtopic deals with transactions in which the issue is whether, at the time an entity enters into a research and development arrangement:
  1. a
    The entity is committed to repay any of the funds provided by the other parties regardless of the outcome of the research and development.
  2. b
    Existing conditions indicate that it is likely that the entity will repay the other parties regardless of the outcome.
  3. c
    The entity is obligated only to perform research and development work for others.
","snippet":"This Subtopic deals with transactions in which the issue is whether, at the time an entity enters into a research and development arrangement:\n(a) The entity is committed to repay any of the funds provided by the other p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:22d536fb34b941c17a9f73c9a50ec719f42400b8f57159fe4dca3c9b1bed00a6","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-25-2","para":"25-2","html":"
An entity shall determine the nature of the obligation it incurs when it enters into an arrangement with other parties who fund its research and development. The factors discussed in paragraphs
730-20-25-3 through 25-9
and other factors that may be present and relevant to a particular arrangement shall be considered when determining the nature of the entity's obligation.
","snippet":"An entity shall determine the nature of the obligation it incurs when it enters into an arrangement with other parties who fund its research and development. The factors discussed in paragraphs 730-20-25-3 through 25-9 a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:69a11307f9e82c72ae9e23598b5d629b68d34f6b1c3681cf9ed1da2c23309655","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3f292b66becdb55378d7257e45e77cd93b84eb5db94b3302a0bc7785dfad7d0e","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"block":null,"heading":"Obligation to Repay the Other Parties","paragraphs":[{"citation":"730-20-25-3","para":"25-3","html":"
If the entity is obligated to repay any of the funds provided by the other parties regardless of the outcome of the research and development, the entity shall estimate and recognize that liability. This requirement applies whether the entity may settle the liability by paying cash, by issuing securities, or by some other means.
","snippet":"If the entity is obligated to repay any of the funds provided by the other parties regardless of the outcome of the research and development, the entity shall estimate and recognize that liability. This requirement appli…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7403d5f371fbde3675cbd32d8faa199761b0e2a39e6f6f326bac7d8f0ab5bd56","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-25-4","para":"25-4","html":"
To conclude that a liability does not exist, the transfer of the financial risk involved with research and development from the entity to the other parties must be substantive and genuine. To the extent that the entity is committed to repay any of the funds provided by the other parties regardless of the outcome of the research and development, all or part of the risk has not been transferred. The following are some examples in which the entity is committed to repay:
  1. a
    The entity guarantees, or has a contractual commitment that assures, repayment of the funds provided by the other parties regardless of the outcome of the research and development.
  2. b
    The other parties can require the entity to purchase their interest in the research and development regardless of the outcome.
  3. c
    The other parties automatically will receive debt or equity securities of the entity upon termination or completion of the research and development regardless of the outcome.
","snippet":"To conclude that a liability does not exist, the transfer of the financial risk involved with research and development from the entity to the other parties must be substantive and genuine. To the extent that the entity i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7aba7f9502bc4a839a8872e6f18362edc6ba3d53a6b85abddbaedba7989d17f4","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-25-5","para":"25-5","html":"
Even though the written agreements or contracts under the arrangement do not require the entity to repay any of the funds provided by the other parties, surrounding conditions might indicate that the entity is likely to bear the risk of failure of the research and development. If those conditions suggest that it is probable that the entity will repay any of the funds regardless of the outcome of the research and development, there is a presumption that the entity has an obligation to repay the other parties. That presumption can be overcome only by substantial evidence to the contrary. In this context, probable means that repayment is likely.
","snippet":"Even though the written agreements or contracts under the arrangement do not require the entity to repay any of the funds provided by the other parties, surrounding conditions might indicate that the entity is likely to …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2232351306999b6e4402bb9b9bb04c517c13be175b5e805db348b1a1013944cb","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-25-6","para":"25-6","html":"
Examples of conditions leading to the presumption that the entity will repay the other parties include any of the following:
  1. a
    The entity has indicated an intent to repay all or a portion of the funds provided regardless of the outcome of the research and development.
  2. b
    The entity would suffer a severe economic penalty if it failed to repay any of the funds provided to it regardless of the outcome of the research and development. An economic penalty is considered severe if in the normal course of business an entity would probably choose to pay the other parties rather than incur the penalty. For example, an entity might purchase the partnership's interest in the research and development if the entity had provided the partnership with proprietary basic technology necessary for the entity's ongoing operations without retaining a way to recover that technology, or prevent it from being transferred to another party, except by purchasing the partnership's interest.
  3. c
    A significant related party relationship between the entity and the parties funding the research and development exists at the time the entity enters into the arrangement.
  4. d
    The entity has essentially completed the project before entering into the arrangement.
","snippet":"Examples of conditions leading to the presumption that the entity will repay the other parties include any of the following:\n(a) The entity has indicated an intent to repay all or a portion of the funds provided regardle…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:744cfa39e77f605e4f7dce26bc170f29905e6892fc38ebb43276e05166b860ea","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-25-7","para":"25-7","html":"
An entity that incurs a liability to repay the other parties shall charge the research and development costs to expense as incurred. The amount of funds provided by the other parties might exceed the entity's liability. That might be the case, for example, if license agreements or partial buy-out provisions permit the entity to use the results of the research and development or to reacquire certain basic technology or other assets for an amount that is less than the funds provided. Those agreements or provisions might limit the extent to which the entity is economically compelled to buy out the other parties regardless of the outcome. In those situations, the liability to repay the other parties might be limited to a specified price for licensing the results or for purchasing a partial interest in the results. If the entity's liability is less than the funds provided, the entity shall charge its portion of the research and development costs to expense in the same manner as the liability is incurred. For example, the liability might arise as the initial funds are expended, or the liability might arise on a pro rata basis.
","snippet":"An entity that incurs a liability to repay the other parties shall charge the research and development costs to expense as incurred. The amount of funds provided by the other parties might exceed the entity's liability. …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:07b200f268dc3c2dad5c08c4ec41d687bcd81c6218799bedc6f9f630dcf61e77","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c63a1b3e7604baddb86cadaf9b79934636d5cc1c6b63994b640d68c5742d44f8","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"block":null,"heading":"Obligation to Perform Contractual Services","paragraphs":[{"citation":"730-20-25-8","para":"25-8","html":"
To the extent that the financial risk associated with the research and development has been transferred because repayment of any of the funds provided by the other parties depends solely on the results of the research and development having future economic benefit, the entity shall account for its obligation as a contract to perform research and development for others.
","snippet":"To the extent that the financial risk associated with the research and development has been transferred because repayment of any of the funds provided by the other parties depends solely on the results of the research an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b23bc0561d3cd20efec50584fc50d06c37c38ba23f4f7a645645576a85cede11","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-25-9","para":"25-9","html":"
If the entity's obligation is to perform research and development for others and the entity subsequently decides to exercise an option to purchase the other parties' interests in the research and development arrangement or to obtain the exclusive rights to the results of the research and development, the nature of those results and their future use shall determine the accounting for the purchase transaction or business combination (or an acquisition by a not-for-profit entity).
","snippet":"If the entity's obligation is to perform research and development for others and the entity subsequently decides to exercise an option to purchase the other parties' interests in the research and development arrangement …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:50df9f517768341751811745b3a45a2dd14e326cc22275c3aa1efa753224afbd","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-25-10","para":"25-10","html":"
The accounting for the cost of an item to be used in research and development is specified by paragraphs
730-10-25-1 through 25-2
. The accounting for recognized intangible assets acquired by the entity is specified in Topic 350.
","snippet":"The accounting for the cost of an item to be used in research and development is specified by paragraphs 730-10-25-1 through 25-2. The accounting for recognized intangible assets acquired by the entity is specified in To…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:30e9f06f0ec27908defad5e0ce626462e672260a4f3bc5ab5f7a50faf66b88b1","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0f8864e4c368edd881f525a5173571ddf548b5573b15e3b7e15b20043bc0111a","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"block":null,"heading":"Loan or Advance to Other Parties","paragraphs":[{"citation":"730-20-25-11","para":"25-11","html":"
If repayment to the entity of any loan or advance by the entity to the other parties depends solely on the results of the research and development having future economic benefit, the loan or advance shall be accounted for as costs incurred by the entity. The costs shall be charged to research and development expense unless the loan or advance to the other parties can be identified as relating to some other activity, for example, marketing or advertising, in which case the costs shall be accounted for according to their nature.
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If warrants or similar instruments are issued in connection with the arrangement, the entity shall report a portion of the proceeds to be provided by the other parties as paid-in capital. The amount so reported shall be the fair value of the instruments at the date of the arrangement.
","snippet":"If warrants or similar instruments are issued in connection with the arrangement, the entity shall report a portion of the proceeds to be provided by the other parties as paid-in capital. The amount so reported shall be …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52d6ba36b2272a611872eca3af0c1ae2281515a6f137088930eecb6c96aaa3dc","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26b44622520ea6c4ccda262de58a774165c17eed57e90a773414756411d8ec51","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"block":null,"heading":"Certain Nonrefundable Advance Payments","paragraphs":[{"citation":"730-20-25-13","para":"25-13","html":"
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 shall be deferred and capitalized. The guidance in this paragraph does not apply to refundable advance payments for future research and development activities. An entity shall not apply the guidance in this paragraph by analogy to other types of advance payments.
","snippet":"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 shall be de…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e04282d0eb7e31a83cc18363edc16bab714463324fe15c2ce41d9575369d5b8a","downloaded_from":"2026-09-10T01:15:14.755Z","last_downloaded_at":"2026-09-10T01:15:14.755Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483095","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"citation":"730-20-25-14","para":"25-14","html":"
Paragraph 730-10-55-3 states that 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) shall be recognized in accordance with Subtopic 730-10.
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Nonrefundable advance payments capitalized under paragraph 730-20-25-13shall be recognized as an expense as the related goods are delivered or the related services are performed. An entity shall continue to evaluate whether it expects the goods to be delivered or services to be rendered. If an entity does not expect the goods to be delivered or services to be rendered, the advance payment capitalized under paragraph 730-20-25-13 shall be charged to expense. The guidance in this paragraph does not apply to refundable advance payments for future research and development activities. An entity shall not apply the guidance in this paragraph by analogy to other types of advance payments.
","snippet":"Nonrefundable advance payments capitalized under paragraph 730-20-25-13shall be recognized as an expense as the related goods are delivered or the related services are performed. An entity shall continue to evaluate whet…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8523d3a2a47c15dc800ad179c38c31ab737bf18fcecfa001280ad6b59d0f6f0f","downloaded_from":"2026-09-10T01:15:18.204Z","last_downloaded_at":"2026-09-10T01:15:18.204Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483068","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:22303dcfc2624d2bc174c72c8c7182bd6fafa23ef232443fa7c244dfaeaded6d","downloaded_from":"2026-09-10T01:15:18.204Z","last_downloaded_at":"2026-09-10T01:15:18.204Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483068","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c5aa6e2378dcca3e979c276c7b4440b95b51be230ad42c22b40c3d6a3b856b13","downloaded_from":"2026-09-10T01:15:18.204Z","last_downloaded_at":"2026-09-10T01:15:18.204Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483068","source_sha256":"b7abe7601c5c0050f4a4c9fe985edb4bb2593feefbeb1ac8d1383e0dd4303903"}},{"number":"50","label":"50 Disclosure","anchor":"50-disclosure","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-20-50-1","para":"50-1","html":"
An entity that under the provisions of this Subtopic accounts for its obligation under a research and development arrangement as a contract to perform research and development for others shall disclose both of the following:
  1. a
    The terms of significant agreements under the research and development arrangement (including royalty arrangements, purchase provisions, license agreements, and commitments to provide additional funding) as of the date of each balance sheet presented
  2. b
    The amount of compensation earned and costs incurred under such contracts for each period for which an income statement is presented.
","snippet":"An entity that under the provisions of this Subtopic accounts for its obligation under a research and development arrangement as a contract to perform research and development for others shall disclose both of the follow…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:597b6d5d0ce8aa461c83df74baf7f5b0cdb1150401d0a9171063151d5a51fa70","downloaded_from":"2026-09-10T01:15:19.916Z","last_downloaded_at":"2026-09-10T01:15:19.916Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483041","source_sha256":"a5edbcfc0778bc1c8b4e7850dc5badc1b262f5fcd6f94451e1620c3b1318baa1"}},{"citation":"730-20-50-2","para":"50-2","html":"
Topic 850 specifies additional disclosure requirements for related party transactions and certain control relationships.
","snippet":"Topic 850 specifies additional disclosure requirements for related party transactions and certain control relationships.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a7ff2c4a42c3decf708588bb504f7a3e391c05a8a42846c18adc1d426ccc6499","downloaded_from":"2026-09-10T01:15:19.916Z","last_downloaded_at":"2026-09-10T01:15:19.916Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483041","source_sha256":"a5edbcfc0778bc1c8b4e7850dc5badc1b262f5fcd6f94451e1620c3b1318baa1"}},{"citation":"730-20-50-3","para":"50-3","html":"
An entity that is a party to more than one research and development arrangement need not separately disclose each arrangement unless separate disclosure is necessary to understand the effects on the financial statements. Aggregation of similar arrangements by type may be appropriate.
","snippet":"An entity that is a party to more than one research and development arrangement need not separately disclose each arrangement unless separate disclosure is necessary to understand the effects on the financial statements.…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:466847924836a958dd4e9e1915de57de670c0591ea894877bba82e16f0f66fa3","downloaded_from":"2026-09-10T01:15:19.916Z","last_downloaded_at":"2026-09-10T01:15:19.916Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483041","source_sha256":"a5edbcfc0778bc1c8b4e7850dc5badc1b262f5fcd6f94451e1620c3b1318baa1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1987e62d401ab555548e97761bcd21d3098a50cb49d2f76c9b790721f9725820","downloaded_from":"2026-09-10T01:15:19.916Z","last_downloaded_at":"2026-09-10T01:15:19.916Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483041","source_sha256":"a5edbcfc0778bc1c8b4e7850dc5badc1b262f5fcd6f94451e1620c3b1318baa1"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4ca2c91620d077720def6f94290ad0bfe8ef317a688853e7069a9866fbd770f5","downloaded_from":"2026-09-10T01:15:19.916Z","last_downloaded_at":"2026-09-10T01:15:19.916Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483041","source_sha256":"a5edbcfc0778bc1c8b4e7850dc5badc1b262f5fcd6f94451e1620c3b1318baa1"}},{"number":"60","label":"60 Relationships","anchor":"60-relationships","is_sec":false,"groups":[{"block":null,"heading":"Contingencies","paragraphs":[{"citation":"730-20-60-1","para":"60-1","html":"
For guidance related to loss contingencies, see Subtopic 450-20.
","snippet":"For guidance related to loss contingencies, see Subtopic 450-20.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:944448e97133b5a2ad331d9d8c5c02b8478de7c1d5a4764df9820a7a5d5c20de","downloaded_from":"2026-09-10T01:15:22.975Z","last_downloaded_at":"2026-09-10T01:15:22.975Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483015","source_sha256":"192304f4dab76558d6635ad76bc27f2b8f35c8e6074d422b0d13923bb83c40f7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0954e3a1423225ca4592793b97b1d427e66846e8758011918c42f7b76118bf2d","downloaded_from":"2026-09-10T01:15:22.975Z","last_downloaded_at":"2026-09-10T01:15:22.975Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483015","source_sha256":"192304f4dab76558d6635ad76bc27f2b8f35c8e6074d422b0d13923bb83c40f7"}},{"block":null,"heading":"Consolidation","paragraphs":[{"citation":"730-20-60-2","para":"60-2","html":"
For guidance on whether and how a sponsor should consolidate a research and development arrangement, see Subtopic 810-30.
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Paragraph superseded on 03/23/2010 after the end of the transition period stated in EITF Issue No. 07-3, \"Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities.\"
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The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
730-20-S99-1AmendedAccounting Standards Update No. 2012-0308/27/2012
730-20-S99-1AmendedAccounting Standards Update No. 2009-0308/24/2009
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See paragraph 730-20-S99-1, SAB Topic 5.O, for SEC Staff views on determining whether an entity is able to repay funds provided by other parties in a research and development arrangement.
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The following is the text of SAB Topic 5.O, Research and Development Arrangements.
","snippet":"The following is the text of SAB Topic 5.O, Research and Development Arrangements.\nFacts: FASB ASC paragraph 730-20-25-5 (Research and Development Topic) states that conditions other than a written agreement may exist wh…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:913a18efc4185654b888553902125c63f82bee28982d72e60c4d0da9280bb6d1","downloaded_from":"2026-09-10T01:15:40.514Z","last_downloaded_at":"2026-09-10T01:15:40.514Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479636","source_sha256":"849cedcd86cce93cbdb5c9b478505aa078bf710b28f4a4b73c000327fd37fe09"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:29e6ef3d209d9add01f4e7a333d94284442d89b83cb50fc060a779fe1d055a95","downloaded_from":"2026-09-10T01:15:40.514Z","last_downloaded_at":"2026-09-10T01:15:40.514Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479636","source_sha256":"849cedcd86cce93cbdb5c9b478505aa078bf710b28f4a4b73c000327fd37fe09"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c23551843e3f44e1335dc015c71f724c218d5d5278e59a46d017d8f831e59fc0","downloaded_from":"2026-09-10T01:15:40.514Z","last_downloaded_at":"2026-09-10T01:15:40.514Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479636","source_sha256":"849cedcd86cce93cbdb5c9b478505aa078bf710b28f4a4b73c000327fd37fe09"}}],"enrichment":{"summary":"ASC 730-20 governs how an entity accounts for arrangements in which other parties (often a limited partnership of investors) fund the entity's research and development. The central question is the substance of the entity's obligation: whether the entity has merely contracted to perform R&D services for others, or has in substance incurred a liability to repay the funding parties. Substance governs over form, so payments labeled royalties or option/purchase prices may in fact be settlement of a borrowing, the purchase price of an asset, or true royalties.","key_points":["The provided text of the Subtopic describes R&D arrangements — typically limited partnerships in which the entity or a related party is general partner and performs the R&D on a best-efforts basis for a fixed fee or cost-plus fee (730-20-05-2 through 05-4).","An entity that is party to an R&D funding arrangement usually incurs an obligation when it enters the arrangement, ranging from an obligation to perform contract R&D work to an obligation to repay the funding parties with a return (730-20-05-6).","Accounting representations are not limited to legal requirements; future payments ostensibly for royalties or to purchase the partnership's interest may in substance be (a) settlement of a borrowing, (b) the purchase price of an asset, or (c) royalties for use of an asset (730-20-05-9).","Financial reporting must faithfully represent the arrangement and must not subordinate substance to form (730-20-05-9).","An entity accounting for its obligation as a contract to perform R&D for others must disclose the terms of significant agreements (royalty arrangements, purchase provisions, license agreements, and commitments to provide additional funding) as of each balance sheet date (730-20-50-1(a)).","Such an entity must also disclose compensation earned and costs incurred under those contracts for each income statement period presented (730-20-50-1(b)); related party disclosures under Topic 850 also apply (730-20-50-2).","Multiple arrangements need not be disclosed separately unless separate disclosure is necessary to understand the financial statement effects; aggregation of similar arrangements by type may be appropriate (730-20-50-3)."],"categories":["Recognition","Disclosure","Contingencies and guarantees","Consolidation"],"audience_level":"intermediate","student_note":"Exam questions hinge on classification: if the sponsor is in substance obligated to repay the investors, the funding is a liability (borrowing), not R&D revenue or a mere service contract. The common misunderstanding is assuming the legal form — a \"best-efforts\" R&D services contract with a partnership — controls; ASC 730-20-05-9 expressly says substance governs.","related_topics":["810-30","450-20","850","730-10","606"],"key_concepts":["research and development arrangement","funded research and development","limited partnership funding vehicle","substance over form","obligation to repay funding parties","contract to perform research and development for others","option to purchase results of r&d","royalty and purchase provisions"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3ecc1589660e5580f8f1742361bee5df395dbc86ccd0629e045a2fd6ce2848aa","downloaded_from":"2026-09-10T01:14:58.781Z","last_downloaded_at":"2026-09-10T01:15:40.514Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"810-30","title":"Research and Development Arrangements","topic_title":"Consolidation","score":0.7971,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e4dea478e1f7dc89e364d8ed6af9d645b465a5fbaa8ead126a4ce5234c561df1","downloaded_from":"2026-09-10T01:30:05.404Z","last_downloaded_at":"2026-09-10T01:30:33.354Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"340-10","title":"Overall","topic_title":"Other Assets and Deferred Costs","score":0.7814,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5b6619643b25e091dda184a25247e18037024be9ba9a176fa6c5e1c51732cffc","downloaded_from":"2026-09-09T23:54:15.524Z","last_downloaded_at":"2026-09-09T23:55:04.724Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"730-912","title":"Contractors—Federal Government","topic_title":"Research and Development","score":0.7688,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e284203eb50a3f735bb991a3b090206a353c10f705810b1577bd9853d096f33e","downloaded_from":"2026-09-10T01:15:43.389Z","last_downloaded_at":"2026-09-10T01:16:04.136Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"730-10","title":"Overall","topic_title":"Research and Development","score":0.7439,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:69895e091060b6e5fe933f8de73f8b7c556c3ae734d55210fda8b9299cf9968b","downloaded_from":"2026-09-10T01:14:28.594Z","last_downloaded_at":"2026-09-10T01:14:54.866Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"810-958","title":"Not-for-Profit Entities","topic_title":"Consolidation","score":0.7361,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f7135178e1c6f1290dcb257b2e5055140795a173c36eb5b6b74dbbb439a96934","downloaded_from":"2026-09-10T01:33:02.909Z","last_downloaded_at":"2026-09-10T01:33:29.760Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"810-942","title":"Financial Services—Depository and Lending","topic_title":"Consolidation","score":0.7358,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:23489174b0872ed3c2790fef164a31f831bf8eaa98dad79fc66683e35ba30cd0","downloaded_from":"2026-09-10T01:31:33.467Z","last_downloaded_at":"2026-09-10T01:32:02.692Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}],"prev":{"number":"730-10","title":"Overall","topic_title":"Research and Development","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:adcf81f884d802636228b370f24bdc30bf4255450e6b7c092ce104d318623234","downloaded_from":"2026-09-10T01:14:28.594Z","last_downloaded_at":"2026-09-10T01:14:54.866Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"730-912","title":"Contractors—Federal Government","topic_title":"Research and Development","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ef92b4671a44288d388552d10a204564d9c0672cb0e905466e8c9bf478fec708","downloaded_from":"2026-09-10T01:15:43.389Z","last_downloaded_at":"2026-09-10T01:16:04.136Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e7b229dfcc9691109a0498efdc3d3e0b1b26cb5fe2619d8a7f7f90ddbaaf2ff4","downloaded_from":"2026-09-10T01:14:58.781Z","last_downloaded_at":"2026-09-10T01:15:40.514Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"730-912","topic":"730","title":"Contractors—Federal Government","area":"Expenses","paragraphs":10,"summary":"This subtopic tells government contractors how to account for best-efforts-basis, research-and-development-cost-sharing arrangements with the federal government. When all six scope conditions in 730-912-15-2 are met (qualifying R&D, contractor retains rights to data/results, best-efforts-only obligation, mutual expectation that costs will exceed funding, no contract combination under 606-10-25-9, and the federal government as sole or principal ultimate customer), the arrangement is not a revenue contract under Topic 606. Instead, costs are expensed as R&D as incurred under Topic 730, and customer funding is recorded as an offset to aggregate R&D expense rather than as contract revenue (730-912-25-1).","concepts":["best-efforts basis arrangement","research and development cost sharing","government contractor","offset to research and development expense","rights to data and results","expectation of costs in excess of funding","follow-on contract uncertainty","combining contracts"],"categories":["Recognition","Revenue","Industry-specific","Presentation"],"level":"intermediate","topic_title":"Research and Development","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-912-00-1","para":"00-1","html":"
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
ContractsAddedAccounting Standards Update No. 2014-0905/28/2014
CustomerAddedAccounting Standards Update No. 2014-0905/28/2014
RevenueAddedAccounting Standards Update No. 2014-0905/28/2014
912-730-15-2AmendedAccounting Standards Update No. 2014-0905/28/2014
912-730-15-3AmendedAccounting Standards Update No. 2014-0905/28/2014
","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nContracts | Added | Accounting Standards Update No. 2014-09 | 05/28/2014 |\nCustomer | Ad…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b67e7e2199931df3f25c92adce3b62e6901b20d7f6e68115a4d80caf103ca3ca","downloaded_from":"2026-09-10T01:15:43.389Z","last_downloaded_at":"2026-09-10T01:15:43.389Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478278","source_sha256":"b3afc508170abd503f52a136b1e0adf7a90f018d5777f7dacb7ec83197ab6daf"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:76e86895d79c829b80d8ba907c1aa3717ae641a9776cc0bf8342fff560600084","downloaded_from":"2026-09-10T01:15:43.389Z","last_downloaded_at":"2026-09-10T01:15:43.389Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478278","source_sha256":"b3afc508170abd503f52a136b1e0adf7a90f018d5777f7dacb7ec83197ab6daf"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:15728f05b7cabe86e58f9298d438b9bf171bad6a0fb8f93da876023d64081fde","downloaded_from":"2026-09-10T01:15:43.389Z","last_downloaded_at":"2026-09-10T01:15:43.389Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478278","source_sha256":"b3afc508170abd503f52a136b1e0adf7a90f018d5777f7dacb7ec83197ab6daf"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-912-05-1","para":"05-1","html":"
This Subtopic provides guidance to government contractors related to identifying research and development activities included in government contracts and the accounting for such activities.
","snippet":"This Subtopic provides guidance to government contractors related to identifying research and development activities included in government contracts and the accounting for such activities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bb6d3521211e254e78b5ebc105253b5dca713ea94209aab208b91ffb113e9a6e","downloaded_from":"2026-09-10T01:15:47.207Z","last_downloaded_at":"2026-09-10T01:15:47.207Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478760","source_sha256":"904d0747bffd5dd019b35e9643ff4c8cbc241b46f13ba1da6038fac447f85d43"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d3e206d357e8360207d30998d6aa553b40d0f79b6a54be7b8c17bcff82b2dbf1","downloaded_from":"2026-09-10T01:15:47.207Z","last_downloaded_at":"2026-09-10T01:15:47.207Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478760","source_sha256":"904d0747bffd5dd019b35e9643ff4c8cbc241b46f13ba1da6038fac447f85d43"}},{"block":null,"heading":"Best-Efforts-Basis, Research-and-Development-Cost-Sharing Arrangements","paragraphs":[{"citation":"730-912-05-2","para":"05-2","html":"
Contractors may enter into contractual arrangements in which the customer agrees to share the estimated costs of certain research and development activities, for example, the development of a prototype for new or advanced weapons systems. In arrangements to perform on a best-efforts basis, the contractor benefits from both lower net research and development costs and the retention of rights to the research and development results. The knowledge gained from such research and development activities may be used by the contractor in future production activities, including follow-on contracts for full-scale production of products based on the prototypes or models developed during the research and development phase. At the same time, the customer benefits from the arrangement by receiving a nonexclusive right to the results of the research and development effort. Consequently, the customer is able to encourage the contractor to focus its research and development efforts on activities important to the customer's long-range, strategic objectives in areas such as national defense.
","snippet":"Contractors may enter into contractual arrangements in which the customer agrees to share the estimated costs of certain research and development activities, for example, the development of a prototype for new or advance…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8d311380132fa6ecfbc7c5b377e72fa2965206112aef830b28ac9b23eb7960df","downloaded_from":"2026-09-10T01:15:47.207Z","last_downloaded_at":"2026-09-10T01:15:47.207Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478760","source_sha256":"904d0747bffd5dd019b35e9643ff4c8cbc241b46f13ba1da6038fac447f85d43"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ea96279e439b5515f61b7d4cff13231c4568d710c1fc7d662cc5e37f2db678d","downloaded_from":"2026-09-10T01:15:47.207Z","last_downloaded_at":"2026-09-10T01:15:47.207Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478760","source_sha256":"904d0747bffd5dd019b35e9643ff4c8cbc241b46f13ba1da6038fac447f85d43"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:24697d3d61ef8a12401aa772590ce218824d7695bb3e6dd33c4c823e76986c22","downloaded_from":"2026-09-10T01:15:47.207Z","last_downloaded_at":"2026-09-10T01:15:47.207Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478760","source_sha256":"904d0747bffd5dd019b35e9643ff4c8cbc241b46f13ba1da6038fac447f85d43"}},{"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":"730-912-15-1","para":"15-1","html":"
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 912-10-15, with specific instrument qualifications noted below.
","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 912-10-15, with specific instrument qualifications noted below.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:940165b2722c151526bb4a06a176c3d9be036ea53a8758eff1f26e25ec87d618","downloaded_from":"2026-09-10T01:15:51.169Z","last_downloaded_at":"2026-09-10T01:15:51.169Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478998","source_sha256":"e5a3b2a1ca079528b85753d1c8a0aab0f42fcaa9445d96a88681d4abdbf2895e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d98c4aacb02eae91980a7d3a706a04d01841839ee8c1573bd5122a769acc7171","downloaded_from":"2026-09-10T01:15:51.169Z","last_downloaded_at":"2026-09-10T01:15:51.169Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478998","source_sha256":"e5a3b2a1ca079528b85753d1c8a0aab0f42fcaa9445d96a88681d4abdbf2895e"}},{"block":null,"heading":"Instruments","paragraphs":[{"citation":"730-912-15-2","para":"15-2","html":"
This Subtopic applies only to contractual arrangements meeting all of the following conditions:
  1. a
    The activities performed in connection with the contractual arrangement qualify as research and development (see Subtopic 730-10).
  2. b
    The contractor retains a right to the data and results of the research and development activities.
  3. c
    The contractual arrangement obligates the contractor to perform only on a best-efforts basis to achieve the agreed-on objectives of the research and development activity, rather than to deliver a product or service meeting defined performance or other (such as design) specifications.
  4. d
    At the inception of the contract, the contractor and the customer enter into the arrangement with the expectation that costs will be incurred in excess of amounts to be funded. This condition will be met if contractual or other documentation specifically evidences acknowledgment of this expectation by both the contractor and the customer. Implicit in this condition is the existence of significant uncertainty at the date the contractor enters into the arrangement regarding the likelihood of successfully securing follow-on contracts related to the research and development activity.
  5. e
    The research and development arrangement is not combined with other contracts in accordance with the guidance on combining contracts in paragraph 606-10-25-9.
  6. f
    The federal government is the sole or principal expected ultimate customer (including foreign military sales) for the research and development activity or products directly resulting from the research and development activity subject to the arrangements.
","snippet":"This Subtopic applies only to contractual arrangements meeting all of the following conditions:\n(a) The activities performed in connection with the contractual arrangement qualify as research and development (see Subtopi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7e1e5f6f83223b71931d3edde08034972fd41e1ebd4e25fa61580c3d21112aca","downloaded_from":"2026-09-10T01:15:51.169Z","last_downloaded_at":"2026-09-10T01:15:51.169Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478998","source_sha256":"e5a3b2a1ca079528b85753d1c8a0aab0f42fcaa9445d96a88681d4abdbf2895e"}},{"citation":"730-912-15-3","para":"15-3","html":"
Contractual arrangements meeting all of the conditions in the preceding paragraph differ from contracts with customers addressed in Topic 606 on revenue from contracts with customers. Such activities are research and development as discussed in paragraph 730-10-15-4(c).
","snippet":"Contractual arrangements meeting all of the conditions in the preceding paragraph differ from contracts with customers addressed in Topic 606 on revenue from contracts with customers. Such activities are research and dev…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1195acbb01832a9b5e3230d98f55b087b2bda48f60281ab1e10f19ed59b0bf8e","downloaded_from":"2026-09-10T01:15:51.169Z","last_downloaded_at":"2026-09-10T01:15:51.169Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478998","source_sha256":"e5a3b2a1ca079528b85753d1c8a0aab0f42fcaa9445d96a88681d4abdbf2895e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0df3395d64c74d6447adc715fac316a07cfe8a7bc55dcfe0c4c6a18f88a179ea","downloaded_from":"2026-09-10T01:15:51.169Z","last_downloaded_at":"2026-09-10T01:15:51.169Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478998","source_sha256":"e5a3b2a1ca079528b85753d1c8a0aab0f42fcaa9445d96a88681d4abdbf2895e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b481fa568af1c7dec9707d678665abd568ae39ea9e0116a1334149234f79c1b7","downloaded_from":"2026-09-10T01:15:51.169Z","last_downloaded_at":"2026-09-10T01:15:51.169Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478998","source_sha256":"e5a3b2a1ca079528b85753d1c8a0aab0f42fcaa9445d96a88681d4abdbf2895e"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Best-Efforts-Basis, Research-and-Development-Cost-Sharing Arrangements","paragraphs":[{"citation":"730-912-25-1","para":"25-1","html":"
Best-efforts-basis, research-and-development-cost-sharing arrangements within the scope of this Subtopic (see paragraph 912-730-15-2) shall be recognized as research and development expense as incurred in conformity with Topic 730. Because of the cost-sharing nature of these fixed-price, best-efforts-basis, research-and-development-cost-sharing arrangements, the amounts funded by the customer shall be recognized as an offset to the contractor's aggregate research and development expense rather than as contract revenues. Example 1 (see paragraphs
912-730-55-1 through 55-3
) illustrates the application of this guidance.
","snippet":"Best-efforts-basis, research-and-development-cost-sharing arrangements within the scope of this Subtopic (see paragraph 912-730-15-2) shall be recognized as research and development expense as incurred in conformity with…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8a5552693ac3310c111b2359ddea057d23e6e7606a9f161276ff24ec340cb66d","downloaded_from":"2026-09-10T01:15:58.968Z","last_downloaded_at":"2026-09-10T01:15:58.968Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479532","source_sha256":"e7c97452a0806f4a2b8a5fb89ede9a07a53928f0fbb695cd9c779f69bac91cf5"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:29a02c4ce96b12ef26133bec8addfc0dc9fb2cd96092b9c7adad6459021190d9","downloaded_from":"2026-09-10T01:15:58.968Z","last_downloaded_at":"2026-09-10T01:15:58.968Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479532","source_sha256":"e7c97452a0806f4a2b8a5fb89ede9a07a53928f0fbb695cd9c779f69bac91cf5"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:47704697080324f22af4ba6950526444ca328a2bfda1ecce8099d17d1b70de1c","downloaded_from":"2026-09-10T01:15:58.968Z","last_downloaded_at":"2026-09-10T01:15:58.968Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479532","source_sha256":"e7c97452a0806f4a2b8a5fb89ede9a07a53928f0fbb695cd9c779f69bac91cf5"}},{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"730-912-55-1","para":"55-1","html":"
This Example illustrates the application of the guidance in paragraph 912-730-25-1 to research and development costs under a best-efforts-basis, research-and-development-cost-sharing arrangement.
","snippet":"This Example illustrates the application of the guidance in paragraph 912-730-25-1 to research and development costs under a best-efforts-basis, research-and-development-cost-sharing arrangement.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1ac03872a47c356fca9efb7e32ae2f18100d8d949b8590f89e2644abf971054b","downloaded_from":"2026-09-10T01:16:00.864Z","last_downloaded_at":"2026-09-10T01:16:00.864Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477222","source_sha256":"7d24a79c299fb4a4534cd1acc1e1d1c2321fe16c5321ad7f495967c73efa5f8d"}},{"citation":"730-912-55-2","para":"55-2","html":"
This Example has the following assumptions:
  1. a
    Estimated aggregate cost to be incurred by contractor in the specified research and development activity: $150
  2. b
    Anticipated reimbursement from customer: $100
  3. c
    As of the current reporting date 50 percent of the estimated aggregate costs have been incurred
  4. d
    Customer has paid 30 percent of its pro rata funding.
","snippet":"This Example has the following assumptions:\n(a) Estimated aggregate cost to be incurred by contractor in the specified research and development activity: $150\n(b) Anticipated reimbursement from customer: $100\n(c) As of t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:72f909141e0d77c56eef6367fa138db4f4af8c0e49d39a93f7806b8055156a2e","downloaded_from":"2026-09-10T01:16:00.864Z","last_downloaded_at":"2026-09-10T01:16:00.864Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477222","source_sha256":"7d24a79c299fb4a4534cd1acc1e1d1c2321fe16c5321ad7f495967c73efa5f8d"}},{"citation":"730-912-55-3","para":"55-3","html":"
The following table illustrates how to record expenditures for research and development in connection with the XYZ project.
","snippet":"The following table illustrates how to record expenditures for research and development in connection with the XYZ project.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8ce7de1d87fbc3108deb1ee2578fd389f0a97d705cdf48142a45d19e1d8ca88a","downloaded_from":"2026-09-10T01:16:00.864Z","last_downloaded_at":"2026-09-10T01:16:00.864Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477222","source_sha256":"7d24a79c299fb4a4534cd1acc1e1d1c2321fe16c5321ad7f495967c73efa5f8d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8bcd993bf8c6fef527eee4584fdf73644059bc945553919cb97bb7499499e3ce","downloaded_from":"2026-09-10T01:16:00.864Z","last_downloaded_at":"2026-09-10T01:16:00.864Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477222","source_sha256":"7d24a79c299fb4a4534cd1acc1e1d1c2321fe16c5321ad7f495967c73efa5f8d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:185c73d7107fc8a6f4a5e950ae7b9b4a3557d7677c8847341a8dc5507257140b","downloaded_from":"2026-09-10T01:16:00.864Z","last_downloaded_at":"2026-09-10T01:16:00.864Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477222","source_sha256":"7d24a79c299fb4a4534cd1acc1e1d1c2321fe16c5321ad7f495967c73efa5f8d"}}],"enrichment":{"summary":"This subtopic tells government contractors how to account for best-efforts-basis, research-and-development-cost-sharing arrangements with the federal government. When all six scope conditions in 730-912-15-2 are met (qualifying R&D, contractor retains rights to data/results, best-efforts-only obligation, mutual expectation that costs will exceed funding, no contract combination under 606-10-25-9, and the federal government as sole or principal ultimate customer), the arrangement is not a revenue contract under Topic 606. Instead, costs are expensed as R&D as incurred under Topic 730, and customer funding is recorded as an offset to aggregate R&D expense rather than as contract revenue (730-912-25-1).","key_points":["The Subtopic applies only if all conditions of 730-912-15-2 are met, including that the activities qualify as research and development under Subtopic 730-10 and the contractor retains a right to the data and results.","The contract must obligate the contractor to perform only on a best-efforts basis toward agreed-on objectives, not to deliver a product or service meeting defined performance or design specifications (730-912-15-2(c)).","At contract inception both parties must expect costs to exceed amounts funded, evidenced by contractual or other documentation, implying significant uncertainty about securing follow-on contracts (730-912-15-2(d)).","The arrangement must not be combined with other contracts under paragraph 606-10-25-9, and the federal government (including foreign military sales) must be the sole or principal expected ultimate customer (730-912-15-2(e)-(f)).","Arrangements in scope differ from contracts with customers under Topic 606 and are research and development as described in paragraph 730-10-15-4(c) (730-912-15-3).","Costs are recognized as research and development expense as incurred in conformity with Topic 730, and amounts funded by the customer are recognized as an offset to aggregate R&D expense rather than as contract revenues (730-912-25-1).","Example 1 (730-912-55-1 through 55-3) illustrates the offset accounting where estimated aggregate costs are $150, anticipated customer reimbursement is $100, 50% of costs have been incurred, and the customer has paid 30% of its pro rata funding."],"categories":["Recognition","Revenue","Industry-specific","Presentation"],"audience_level":"intermediate","student_note":"The exam trap is treating customer funding as revenue: under this Subtopic the reimbursement is netted against R&D expense, not presented as contract revenue, because the arrangement is cost sharing rather than a Topic 606 contract with a customer. Watch the six scope conditions closely—failing even one (e.g., defined performance specifications, or a non-federal ultimate customer) pushes the arrangement back into Topic 606.","related_topics":["730-10","606-10","912-10","912-20","912-235"],"key_concepts":["best-efforts basis arrangement","research and development cost sharing","government contractor","offset to research and development expense","rights to data and results","expectation of costs in excess of funding","follow-on contract uncertainty","combining contracts"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6e8624dc56f529f3e3a284ce227b92741b692e92adeba3c70860c6f59950998c","downloaded_from":"2026-09-10T01:15:43.389Z","last_downloaded_at":"2026-09-10T01:16:04.136Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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Development","score":0.7628,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:07e65ca39a358cb61e979c5786e3d9e96090b9105379557b783faf02096b4933","downloaded_from":"2026-09-10T01:14:28.594Z","last_downloaded_at":"2026-09-10T01:14:54.866Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"810-30","title":"Research and Development 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It directs users to 985-20-25-1 for costs incurred to establish the technological feasibility of software to be sold, leased, or otherwise marketed, and to 985-20-25-8 through 25-10 for the cost of purchased software to be marketed.","concepts":["research and development costs","computer software to be sold, leased, or otherwise marketed","technological feasibility","purchased computer software","cross-reference subtopic","software capitalization"],"categories":["Recognition","Intangibles and goodwill","Industry-specific"],"level":"introductory","topic_title":"Research and Development","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"730-985-05-1","para":"05-1","html":"
This Subtopic only provides links to guidance on research and development costs of computer software.
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Paragraph 985-20-25-1 specifies the treatment for costs incurred to establish the technological feasibility of a computer software product to be sold, leased, or otherwise marketed.
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See paragraphs
985-20-25-8 through 25-10
for guidance regarding the cost of purchased computer software to be sold, leased, or otherwise marketed.
","snippet":"See paragraphs 985-20-25-8 through 25-10 for guidance regarding the cost of purchased computer software to be sold, leased, or otherwise marketed.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:47e7a6fa172fa4e491a79eeb26263992af477ca084f1c7313cd8b1e2c4c692a9","downloaded_from":"2026-09-10T01:16:08.583Z","last_downloaded_at":"2026-09-10T01:16:08.583Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478821","source_sha256":"5ec7c2c53052deb836b2c454820f66a03d610fe31809a3df0229318870778d0e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bfe2459fc70c98348e6d0617cef042ebabe179c5d383d08efb53ce9a7abb2542","downloaded_from":"2026-09-10T01:16:08.583Z","last_downloaded_at":"2026-09-10T01:16:08.583Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478821","source_sha256":"5ec7c2c53052deb836b2c454820f66a03d610fe31809a3df0229318870778d0e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cfb08052770e511f05f11baa758bf9b6a6dfe1f6144fc050f39ff9914aa32d2b","downloaded_from":"2026-09-10T01:16:08.583Z","last_downloaded_at":"2026-09-10T01:16:08.583Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478821","source_sha256":"5ec7c2c53052deb836b2c454820f66a03d610fe31809a3df0229318870778d0e"}}],"enrichment":{"summary":"ASC 730-985 is a \"link\" subtopic: it contains no substantive rules of its own but points readers from the research and development Topic to the software guidance. It directs users to 985-20-25-1 for costs incurred to establish the technological feasibility of software to be sold, leased, or otherwise marketed, and to 985-20-25-8 through 25-10 for the cost of purchased software to be marketed.","key_points":["This Subtopic only provides links to guidance on research and development costs of computer software (730-985-05-1).","Paragraph 985-20-25-1 governs the treatment of costs incurred to establish the technological feasibility of a computer software product to be sold, leased, or otherwise marketed (730-985-25-1).","Paragraphs 985-20-25-8 through 25-10 govern the cost of purchased computer software to be sold, leased, or otherwise marketed (730-985-25-2).","Because the Subtopic is purely a cross-reference, no recognition, measurement, or disclosure requirements originate here."],"categories":["Recognition","Intangibles and goodwill","Industry-specific"],"audience_level":"introductory","student_note":"Know the navigation point: software R&D questions are answered in ASC 985-20, not in ASC 730 itself. The common misunderstanding is thinking ASC 730 sets a separate rule for software costs — it simply expenses costs until technological feasibility is established under 985-20.","related_topics":["985-20","730-10","350-40","350-30"],"key_concepts":["research and development costs","computer software to be sold, leased, or otherwise marketed","technological feasibility","purchased computer software","cross-reference subtopic","software capitalization"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:30988d6e2baa729e3cb19dce48debbde20f1e6d963e723d324b525395af18058","downloaded_from":"2026-09-10T01:16:06.499Z","last_downloaded_at":"2026-09-10T01:16:08.583Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"730-10","title":"Overall","topic_title":"Research and 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established by retrieval timestamps"}},{"number":"985-10","title":"Overall","topic_title":"Software","score":0.738,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9e595587591f909267112058ba73d6b28900508f4c04ec1054e9d46ade45cf34","downloaded_from":"2026-09-10T02:28:16.187Z","last_downloaded_at":"2026-09-10T02:28:23.457Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"350-985","title":"Software","topic_title":"Intangibles—Goodwill and Other","score":0.7377,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:657b291a4a997a00c2247d3e93077bea1d6082b6ddd7ed44759032b5ee52b1e9","downloaded_from":"2026-09-10T00:05:21.279Z","last_downloaded_at":"2026-09-10T00:05:31.733Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"985-20","title":"Costs of Software to Be Sold, Leased, or 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established by retrieval timestamps"}}],"prev":{"number":"730-912","title":"Contractors—Federal Government","topic_title":"Research and Development","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ef92b4671a44288d388552d10a204564d9c0672cb0e905466e8c9bf478fec708","downloaded_from":"2026-09-10T01:15:43.389Z","last_downloaded_at":"2026-09-10T01:16:04.136Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"next":{"number":"740-10","title":"Overall","topic_title":"Income 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constitute research and development and requires that R&D costs within its scope be charged to expense when incurred (730-10-25-1), because the future benefits are too uncertain to justify capitalization (730-10-05-2 through 05-3). Subtopic 730-10 supplies the definitions, cost elements (including the \"alternative future use\" test for materials, equipment, facilities, and purchased intangibles), scope exclusions (contract R&D for others, extractive industries, routine alterations, market research, and R&D assets acquired in a business combination, NFP acquisition, or JV formation), and the requirement to disclose total R&D expense for each income statement period (730-10-50-1). The remaining subtopics address special settings: 730-20 looks to the substance of externally funded R&D arrangements (contract to perform R&D for others versus an in-substance liability to repay the funding parties) and imposes disclosure of significant agreement terms; 730-912 lets federal government contractors in best-efforts cost-sharing arrangements meeting all six conditions of 730-912-15-2 expense costs as R&D and record customer funding as an offset to aggregate R&D expense rather than revenue; and 730-985 is purely a cross-reference to the software guidance in 985-20. The unifying idea is immediate expense recognition, with substance-over-form governing how funding and arrangements are characterized.","concepts":["research and development costs","expense as incurred","alternative future use test","research and development arrangements","substance over form","best-efforts cost-sharing arrangements","offset to aggregate r&d expense","disclosure of total r&d expense"],"categories":["Recognition","Disclosure","Industry-specific","Intangibles and goodwill"],"level":"intermediate","provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b06b3a94307a8e0f26b7a4177dd065f4b9bbfd22a6003593c9dc902cb85c966e","downloaded_from":"2026-09-10T01:14:28.594Z","last_downloaded_at":"2026-09-10T01:16:08.583Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}}