Market Research costs - capex or revenue?

KidsBeeHappy

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Oct 9, 2007
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Market research costs, for a product still in development, that hasn't yet traded. Would these be capital or revenue?

Many thanks
Sandra
 
isn't revenue income?

It could be a simple busienss cost or a 'cost of sales'
 
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Revene expenditure = Profit and Loss expenses
Capital Expenditure = balance sheet expenditure - fixed assets.

Just wondering if the market research is basically considered part of the build/capital/development costs.
 
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Market research costs, for a product still in development, that hasn't yet traded. Would these be capital or revenue?

Many thanks
Sandra

The rules for capitalisation of development costs are found in SSAP 13 (para 25 if you are interested in looking it up), and are quite strict, and I cannot see a case for what you describe being other than a revenue expense.

Chris
 
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That looks like the most sensible option. It seems daft to be charging the P&L account with costs when the thing is only part built and not trading.
 
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