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CFA Level 1 Question of the Week - Financial Reporting and Analysis

An artificial intelligent start-up in Silicon Valley is working on a software for robot babysitters. Assuming that the firm follows US GAAP, how will the firm's accountant allocate the Research and Development costs most appropriately?
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CFA Level 1 Question of the Week - Financial Reporting and Analysis 10 votes

A. Expense the both Research and Development costs.
60% 6 votes
B. Expense the Research cost and capitalize the Development cost.
40% 4 votes
C. Capitalize the Research cost and expense the Development cost.
0% 0 votes
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