Lesson: Research and Development Example

In this lesson, delve into the intricacies of research and development costs with Nick Palazzolo, CPA, who demystifies the calculation process for what expenses should be recognized in the current year. With a practical question at hand, he encourages a thoughtful examination of various R&D-related expenses, from materials used in projects to personnel costs. Nick guides through the rationale for expensing or capitalizing items like equipment with future utility, as well as the treatment of depreciation, consulting fees, and indirect costs, ensuring clarity on how each contributes to the total R&D expenditure figure. His approach invites a lively engagement with the material, making the complexities of accounting for research and development costs more approachable.