R&D is supposed to be recorded in P&L as OPEX.
There are three major exceptions:
- If a certain R&D project is executed as a service to another Business then it should be captured as COGS
- If some R&D costs relate to Tangible Assets that have an alternative future use, the company can capitalize it by recording it in P&L as a Fixed Assets and amortized its cost over the projected lifetime of the developed Product
- If R&D is a critical component of the Business which drives the Sales growth then Financial Management may choose a policy of capitalizing the Development part or even a full-amount of R&D expense and then amortize it over the projected lifetime of the developed Product
See also
Business / Business Administration / Financial Management / Financial Accounting / Profit and Loss (P&L)