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    Hermansherman's Avatar
    Hermansherman Posts: 37, Reputation: 4
    Junior Member
    		  
    #1

    Mar 24, 2008, 05:35 AM
    License payments - where to show?
    I work at a small biotech company.
    Occasionally we license compounds from other companies and then spend our time and money developing the compounds to hopefully be a drug approved by the FDA someday.

    My question is, where should the license payments be presented on our P+L?
    As a Research + Development expense - because the license payments are integral to acquiring the compound and the R&D expenses that follow

    OR

    Selling General + Administrative expense - because it is an administrative expense and should not be considered part of Research and Development activities.

    Also, if you could point to any source for this recommendation, it would be extremely helpful.

    THank you in advance, Herman
    MaggieMouse's Avatar
    MaggieMouse Posts: 226, Reputation: 8
    Full Member
    		  
    #2

    Mar 24, 2008, 07:18 AM
    I would use R&D because clearly it's product related.
    Hermansherman's Avatar
    Hermansherman Posts: 37, Reputation: 4
    Junior Member
    		  
    #3

    Mar 24, 2008, 07:31 AM
    Maggie, Thank you

    Would you have any reference or source you could point me to??

    Thank you in advance, Herman
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