The objectives of this standard are to preclude research and development costs from being capitalized and provide useful financial information regarding research and development activities.
Research is planned search or critical investigation aimed at discovery of new knowledge.
Development is the translation of research findings or other knowledge into a plan or design for a new product, service, or process or for a significant improvement to an existing product, service, or process. Accounting for research and development costs All research and development costs shall be charged to expense when incurred. All costs incurred for the purpose of research and development activities shall be charged to expense as research and development costs. If some activities, in the software product process correspond with the definition of research and development activities, related costs shall be charged to expense as research and development costs. Research and development costs compromise all costs incurred in relation to research and development activities, including labor costs, raw material costs, depreciation costs, and allocated indirect costs.