R&D Expense

Question 1

What items are included in R&D Expense

Answer 1

• New Knowledge
• new Technology
• Conceptual
• Search for product alternatives
• Modification of Design
• Pre production
• Not useful for commercial use

Question 2

What items are excluded from R&D Expense?

Answer 2

Commercial production 
Production 
Existing product 
Existing capability 
Periodic Design 
Patent application 
Improvement of a product or process

Question 3

If an asset is purchased that is exclusively for R&D, how should it be booked?

Answer 3

It should be expensed immediately