Research and development intangible assets acquired in an asset acquisition are capitalized only if they have an alternative future use. Circumstances when there is an alternative future use are expected to be limited. For an asset to have alternative future use, it must be reasonably expected (greater than a 50% chance) that an entity will achieve economic benefit from such alternative use and further development is not needed at the acquisition date to use the asset.

Research and development intangible assets acquired in a business combination are recognized and measured at fair value and classified as indefinite-lived intangible assets until completion or abandonment. Research and development activities acquired in a business combination are not required to have an alternative future use in order to be recognized.

The price paid reflects expectations about the probability that the future economic benefits of the asset will flow to the entity. The probability recognition criterion is always assumed to be met for separately acquired intangible assets.