Research and development costs

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Research and development costs (also shortening research costs , development costs ; English Research & development costs , R & D ) are included in the accounting those costs caused by operational research and development arise.


Research and development is the OECD - Frascati Manual characterizes According as "any creative work , which will be undertaken in a systematic manner to the knowledge deepening or new knowledge to gain." In this sense, research and development takes place in research-based companies . Each of the basic operational functions of procurement , production , financing and sales causes costs. The cost type research and development costs ( R&D costs ) resulting from research and development increases the value of the products and is therefore part of the production costs . For companies with a high R&D share, it is worth creating a separate cost center to which the R&D costs incurred are assigned. In specialist literature and in practice, the functions of research and development are often considered interrelated, but a distinction must be made between the two functions in business administration and accounting law .


The following operational sub-segments cause R&D costs:

The financial sector has to provide the capital required for investments in R&D property , plant and equipment , operating resources and personnel . These cause the cost types depreciation , material , maintenance and repair costs and personnel costs .

Business aspects and key figures

In the early R&D phases of product development, there is only a very imperfect knowledge of the subsequent cost effects. In multi-product companies , R&D costs incurred can only partially be assigned to a specific product and are then direct costs or special direct costs of production (such as the costs for the further development of an existing product), while the majority of the remainder (especially basic research) belongs to overhead costs .

The business key figure of R&D intensity ( research intensity ) measures the willingness to innovate of companies:

The higher the proportion of R&D costs in the total costs or sales revenues of a company, the more research-intensive and innovative it is to be classified. Research - intensive, cutting-edge technology companies have an R&D intensity of more than 7%, sectors of the "advanced technologies" between 2.5% and 7%. The first category includes, in particular, pharmaceutical companies , the electronics industry , radio and communications technology , aircraft construction and weapons technology , while the latter includes the automotive industry , mechanical engineering , machine tool construction , medical , measurement and control technology . The other branches of the economy are counted as low-tech .

Since the R&D costs relate to the development of future or the improvement of existing products, they are of decisive importance for the product cycle management of a company. The R&D costs incurred must be pre-financed by the cash flow from existing production , but ultimately the cash flow expected from new / further developed products must be used to amortize the R&D costs caused by these products. Therefore, the R&D costs become part of the cost and price calculation of these products. The period of time during which the new product generates sales on the market is also called the pay-back period , because during this time the cash flow resulting from the sales process ensures the return of the R&D costs:

For all companies with patented products (especially pharmaceutical companies) the pay-back period is largely limited to the duration of the patent protection. This enables them to realize a monopolistic price and not only compensate for the R&D costs of the invention but also make a profit . After the protection period has expired, competitors can also bring the product onto the market ( generics in the pharmaceutical sector) who - due to the lack of R&D expenditure - can offer them more cheaply.

R&D costs are tied up in capital until they have flowed back from the sales process of the new product. Delays in the market readiness or overruns of the R&D cost budget contribute to a considerable loss of profit and extend the pay-back period. While the other types of costs represent past depreciation, R&D costs mean an investment in the future. The profits a company can generate from product innovations are called pioneering profits .


Accounting according to the commercial code

According to Section 255, Paragraph 2, Clause 4 of the German Commercial Code, there is a prohibition on capitalizing research and sales costs in the balance sheet for production costs . Section 255 (2a) of the German Commercial Code contains legal definitions for the terms research and development. According to this, research is "the independent and systematic search for new scientific or technical knowledge or experience of a general nature, about whose technical usability and economic success prospects basically no statements can be made" and development is "the application of research results or other knowledge for the new development of goods or processes or the further development of goods or processes by means of significant changes ”. From this it follows that the research costs are (also) attributed by law to a distance from the product, which is responsible for the activation ban. If research and development can be reliably distinguished from one another, however, development costs can be capitalized ; research costs are regularly recorded as expenses (Section 255 (2a) sentence 1 HGB). This corresponds to IAS 38.52 ff. And 38.7, according to which research costs may not be capitalized (IAS 38.54 f.). However, if development costs lead to products that are ready for the market , they can be distinguished from other development costs and if they generate future excess payments, they must be capitalized (IAS 38.57). This is done in the balance sheet item intangible assets . In Section 275 (2) and (3) of the German Commercial Code (HGB), R&D costs are not shown separately in the income statement, neither in the total cost nor in the cost of sales method . Therefore, the material and personnel serving the R&D are included in the material costs and the personnel expenses, the remaining remainder according to § 275 Abs. 2 Nr. 8 HGB in the "other operating expenses".


The new accounting law that came into force on January 1, 2013 does not contain any specific requirements for accounting for research and development costs. The literature suggests, based on the balance sheet recognition criteria contained in Art. 959 OR in connection with the standards for evaluation ( Art. 960 ff. OR), to record research costs as expenses and to capitalize development costs, provided it is sufficiently probable that the in In accordance with Art. 959 Para. 2 OR capitalized development costs result in future cash inflows. The proposed accounting rules are based on IFRS .


In Austria, according to Section 197 (2) UGB, there is a prohibition on capitalizing intangible fixed assets that were not acquired for a fee. As a result, research and development costs are to be posted as personnel costs or material costs in the income statement as soon as they are incurred. As a result, Austrian companies tend to have a worse profit situation than German companies .

Individual evidence

  1. OECD, Frascati Manual , 1993, Chapter 2, p. 1
  2. Günter Wöhe , Introduction to General Business Administration , 2013, p. 716
  3. Günter Wöhe, Introduction to General Business Administration , 2013, p. 716
  4. Wolfgang Beitz, Simultaneous Engineering: An answer to the challenges of quality, costs and time , in: ZfB supplementary book, 1995, p. 3 f.
  5. Harald Legler / Rainer Frietsch, New definition of the knowledge economy - research-intensive industries and knowledge-intensive services , June 2006, p. 8
  6. Jörg Abel (ed.), Low-tech company at a high-tech location , 2007, p. 11
  7. E. Richard Gold / Matthew Herder / Michel Trommetter, The Role of Biotechnology Intellectual Property Rights in the Bioeconomy of 2030 , OECD International Futures Program, 2007 ( PDF ; 180 kB)
  8. Lukas Müller / Markus Mühlemann, Research and Development Costs According to the New Accounting Law - Are these costs to be recorded as expenses or as assets ?, Current legal practice 21 (2013) 1639-1652 ; see. there are also the accounting examples.