(84)-EXAMPLES OF RESEARCH AND DEVELOPMENT ITEMS

Examples of Research and Development and Non Research and development Items

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.