Lesson: Classification of R&D Costs

In this lesson, dive into the financial nuances of R&D costs with the energetic explanation from Nick Palazzolo, CPA. Nick unravels the complexities of various expenses associated with research and development, from the costs involved in conceptualizing product alternatives to acquiring copyrights and trademarks. He clarifies the differences between expenses and assets within this sphere, such as when certain costs should be considered a long-term investment versus an R&D expense. Nick also delves into the accounting treatments for improving or replacing assets, including when to capitalize costs or adjust accumulated depreciation. Engaging and elucidative, this lesson is key in understanding how R&D activities impact financial statements.