MGCR 211 Chapter 8 3/19/2012 6:11:00 AM
o Difficult to measure benefits derived. Advertising is usually an
o Must separate the research and development costs. We look
at them as two separate costs.
Researching new product or process
Research costs are expensed!
Usually capitalized and amortized
5 conditions for capitalizing developing costs
Product must be definable
Feasibility must be established
Management intends to sell the product
Must be a real market for the product
Company must have the funds to complete the
Capitalizing versus expensing
- Development expense 25,000