R&D expenses include, the research phase of the relevant expenditures when incurred, should be expensed to current profit and loss (management expenses ), the development phase and can not distinguish between the research phase and the development phase of the expenditures.
China's relevant system of research and development costs on the norms exist in two areas one is the Ministry of Finance document on February 15, 2006, Caihui [2006] No. 3 issued by the "Accounting Standard for Enterprises No. 6 - Intangible Assets", and the second is the March 16, 2007 by the Chinese people **** and the Enterprise Income Tax Law of the People's Republic of China adopted by the Fifth Session of the Tenth National People's Congress of the People's Republic of China on March 16, 2007, which came into effect on January 1, 2008.
The former regulates the method of recognition, measurement, recording and reporting of R&D expenses by enterprises from the perspective of accounting, while the latter regulates the collection, amortization and offsetting of R&D expenses against enterprise taxable income by enterprises from the perspective of tax law.
The treatment of R&D expenses:
China's accounting standards for the treatment of R&D expenses are divided into two major parts of the first is the research phase of the costs incurred and can not distinguish between the research phase of R&D expenditures and the development phase of R&D expenditures are fully expensed, and the second is the development stage of the enterprise's internal research and development project expenditures, which can be demonstrated that meets the conditions of the intangible assets capitalized expenditures, amortized in installments.