Research and development items
Examples given by accounting standards of activities that would normally be included in research and development are:
- Experimental, theoretical or other work aimed at the discovery of new knowledge or the advancement of existing knowledge.
- Searching for applications of that knowledge.
- Formulation and design of possible applications for such work.
- Testing in search for, evaluation of, product, service, or process alternatives.
- Design, construction and testing of pre-production prototypes and models and development batches.
- Design of products, services, processes or systems involving new technology or substantial improving those already produced or installed.
- Construction and operation of pilot planets.
Non Research and development Items
Examples of activities that would normally be excluded from research and development include:
- Testing and analysis either of equipment or product for purpose of quality or quantity control.
- Periodic alterations to existing products, services or processes even though these may represent some improvements.
- Operations research not tied to a specific research and development activity.
- Cost of corrective action in connection with break-downs during commercial production.
- Legal and administrative work in connection with patent applications, records and litigation and the sale or licensing of patents.
- Activity, including design and construction engineering, relating to the construction, relocation, rearrangement or start-up facilities or equipment other than facilities or equipment whose sole use is for a particular research and development project.
- Market research.