New accountant guidelines on acquired R&D

There is a new draft of accounting guidelines for dealing with acquired in-process research and development (IPR&D) assets. The Working Draft of AICPA Guide Assets Acquired to Be Used in Research and Development Activities goes in to great detail on how to value and booking these assets. This is a welcome step forward. As I noted in an earlier posting, it is still common for companies to book much of the intangibles acquired in a business combination as “goodwill” rather than as a specific intangible asset. Having better guidelines for dealing with IPR&D should help.
Of course, this still doesn’t deal with self-generated IPR&D. As I understand it, R&D spending is still required to be expensed immediately, whereas acquired IPR&D is treated as an investment. The new guideline take on some of the related issues, such as the valuation of IPR&D, accounting for acquired IPR&D assets subsequent to the acquisition date and the different accounting treatment of assets used in R&D activities acquired in a business combination and those acquired in an asset acquisition. All of these are steps toward a more comprehensive approach to accounting for R&D as an intangible asset, regardless of whether it is internally generated of acquired from outside.
Comments will be accepted on the draft until March 2012.
Thanks to the folks over at BVR’s Intellectual Property Blog for highlighting this.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s