Test: CPA Financial Accounting and Reporting (FAR)

1.

Which of the following is correct regarding accounting for patent costs?

Legal costs incurred to defend a patent will be capitalized but only if the legal proceedings are unsuccessful

Most costs incurred to generate a patent internally will be expensed

Fees to purchase an existing patent from another party are expensed

Legal costs incurred to defend a patent will be expensed but only if the legal proceedings are successful

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