Patent Application Costs: US GAAP accounting



Could anyone offer some input on the correct way to account for patent
applications costs (primarily legal) under US GAAP. The company in mind
always has about twenty patent applications in process. Is the correct
method to just capitalize and then wait until the outcome of the patent
application to start either amortizing the cost over the patent life /
write-off due to unsuccessful application? Alternatively, can a company set
a policy whereby they just start amortizing patent applications costs over a
set period as soon as the costs are paid (of course, any amounts spent on
unsuccessful applications would be written off as soon as an unsuccessful
outcome was final). If it is okay to choose the latter methodology, what is
an acceptable/common amortization life?

Any input on trademark applications would also be appreciated.

Matt P


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