CFA Practice Question

CFA Practice Question

The following cost incurred in developing patents and copyrights that can be capitalized is ______.
A. legal fees.
B. development costs.
C. no costs can be capitalized.
Explanation: Only legal fees incurred in registering internally developed patents and copyrights can be capitalized. The full acquisition cost is capitalized when such assets are purchased from other entities.

User Contributed Comments 3

User Comment
CalebMast Exam defaults to IFRS, not GAAP - worth noting.
fobucina I thought under US GAAP, certain costs pertaining to software development can be capitalized if technological feasibility can be proven. IFRS allows for capitalization of development costs if technological feasibility and intent to sell upon completion are demonstrated.
sshetty2 Gotta read the question here, they aren't talking about capitalization of costs in general but of developing patents and copyrights
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