During its first year of operation, Dovery Company incurred $345,000 of research costs undertaken with the prospect of gaining new technical understanding about a new nanotechnology procedure. An additional $515,000 was incurred to develop a production process to use that new technology to produce a new lubricant product. Under U.S. GAAP, which of the following is the appropriate accounting for
these costs?
A) expense $860,000
B) expense $345,000 and capitalize $515,000 as an intangible asset
C) expense $515,000 and capitalize $345,000 as an intangible asset
D) capitalize $860,000 as an intangible asset
Answer: A
Business
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