What is In-process research and development?
In short
In-process research and development acquired in a business combination is recognized at fair value as an indefinite-lived intangible asset until the project is completed, when amortization begins, or abandoned, when it is written off.
Key takeaways
- In an asset acquisition, it is expensed unless it has an alternative future use.
- Research and development the company does itself after the acquisition is expensed.
- It is tested for impairment at least annually while indefinite-lived.
Where it's tested
FAR: Intangible Assets & Goodwill — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under US GAAP, internally generated research and development costs are: