I would like to record about the key points of the US CPA exam content.
<Create and note the points based on mainly Becker’s workbook>
Amortization
- An intangible asset such as a copyright or patent is amortized (straight-line, unless another method is indicated) over the shorter of its estimated life or remaining legal life.
Accounting for Research and Development Costs
- Under US GAAP, research and development (R&D) costs are generally required to be expensed in the period in which they are incurred. However, for equipment and facilities used in R&D activities, the depreciation expense is not capitalized. Specifically, the following guidelines apply.
- The acquisition cost of equipment purchased for use in R&D activities is capitalized as an asset. This equipment is used in R&D projects, and its acquisition cost is considered an asset related to R&D activities.
- The depreciation expense for equipment used in R&D activities is expensed over the period during which the equipment is used. This depreciation expense is recorded as an R&D expense.
Organization costs
- Organization costs expensed for GAAP financial income (no asset) but deducted in later years for tax purposes such as the legal fees, printing and registration cost as start-up costs.
Legal fees
- Legal fees for an unsuccessful defense of a trademark are an expense. Legal fees for a successful defense of the trademark are added to the asset value of the trademark.
