Lesson: Research and Development Costs Example

In this lesson, Nick Palazzolo, CPA, breaks down the intricacies of accounting for Research and Development (R&D) costs. Tackling an example, Nick encourages engagement by prompting to consider whether specific R&D related items should be expensed or capitalized. With clear explanations, he navigates through the treatment of materials, equipment, and personnel costs associated with R&D, solidifying the concept that while most R&D costs are expensed, certain assets like equipment with alternative future uses are to be capitalized. By the end of the lesson, a thorough walkthrough of computing total R&D expenses provides a real-world grasp of how to present these figures within financial documents, honing in on skills that can earn vital points during the exam.