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ASC 730 — Research and Development

Below is an overview of FASB Accounting Standards Codification Topic 730, Research and Development, as well as a list of FASB Accounting Standards Updates (ASUs) and proposed ASUs related to this Topic.


ASC 730 comprises two Subtopics (Overall and Research and Development Arrangements). Below is an overview of each Subtopic.

730-10 Overall

ASC 730-10 notes the following:


The Research and Development Topic establishes standards of financial accounting and reporting for research and development costs. The Overall Subtopic specifies:

  1. Those activities that shall be identified as research and development for financial accounting and reporting purposes
  2. The elements of costs that shall be identified with research and development activities
  3. The accounting for research and development costs
  4. The financial statement disclosures related to research and development costs.

730-20 Research and Development Arrangements

ASC 730-20 notes the following:


This Subtopic provides guidance on research and development arrangements. Research and development arrangements have been used to finance the research and development of a variety of new products, such as information processing systems, medical technology, experimental drugs, electronic devices, and aerospace equipment. Entities may enter into arrangements for any of the following reasons:

  1. To transfer all or part of the uncertainty and risk involved with the research and development to others
  2. To obtain the benefit of funds that are made available because of tax incentives for investors
  3. To attract qualified research and development personnel who otherwise might be concerned that funding might not be assured
  4. To avoid expanding the ownership of the entity and the impact on earnings per share (EPS) that would result from issuing equity securities
  5. To avoid debt service expenditures and the impact on the entity's debt-to-equity ratio that would result from issuing debt securities
  6. To avoid the impact on the entity's near-term earnings that would result if it incurred the related research and development expenses.

The full text of ASC 730 can be found in the FASB Accounting Standards Codification (link to the FASB's Web site; registration required). Also, the full text of the Codification and Deloitte-authored Q&As related to the Codification are available in the Deloitte Accounting Research Tool (DART) Web site (subscription required).

Content from the FASB Accounting Standards Codification® included at is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116, and is reproduced with permission.

FASB Accounting Standards Updates

    The following ASUs amended the guidance in this Topic:

    Proposed FASB Accounting Standards Updates

      No current proposed ASUs on Topic 730.

      Correction list for hyphenation

      These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.