Research and development (R&D) costs are generally expensed when incurred. However, capitalization may occur only if the asset has an "alternative future use." This means it can be used in other projects or for other purposes beyond the specific R&D effort.
This principle aligns with both federal and private-sector accounting under FASAB and FASB standards.
Relevant References:
FASAB SFFAS No. 10 – Accounting for Internal Use Software
FASB ASC 730 – Research and Development
GAO Red Book – Capitalization Guidelines
Answer: D. have alternative future use
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