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US GAAP—Issues and Solutions for the Pharmaceuticals and Life Sciences Industries
5. Development expenditure once capitalization criteria are met—Scenario 1
Relevant guidance
Company A has obtained regulatory approval for a new
respiratory drug and is now incurring costs to educate its sales
force and perform market research.
Research and development costs… shall be charged to expense
when incurred [ASC 730–10–25–1].
Expenses are outflows or other using up of assets or incurrences
of liabilities (or a combination of both) from delivering or
producing goods, rendering services, or carrying out other
activities that constitute the entity’s ongoing major or central
operations [CON 6, par. 80].
Should Company A capitalize
these costs? 
No. Company A should expense sales and marketing expenditures such as training a sales force or performing market research as
incurred. This type of expenditure does not create, produce or prepare the asset for its intended use.