R&D is the process by which a company works to obtain new knowledge that it might use to create new technology, products, services, or systems that it will either use or sell. The goal most often is to add to the company’s bottom line. R&D often takes place in an internal department in a company, but it can also be outsourced to a specialist or a university. Large multinational companies might do all three, and some of the outsourced work might be done in another country so that the company leverages both the talent and local market knowledge there. Outsourced R&D is especially appealing to the small business owner who has a new product concept but lacks the design or engineering staff needed to create and test options. R&D is not an asset, it’s an expense. For that reason, general accounting standards and practices dictate that most (but not all) costs associated with R&D be charged to expense as incurred.