Which of the following costs generally must be expensed concerning internally developed intangible assets?

Internally developed intangible assets, such as patents and trademarks, have specific accounting treatment under GAAP. The correct answer highlights that research and development costs must generally be expensed as incurred because they do not meet the criteria for capitalization.

In particular, the costs associated with research activities, which involve new knowledge creation or improvements, and development activities, which entail the application of research findings, are considered uncertain in terms of future economic benefits at the time these costs are incurred. Consequently, they do not provide a reliable basis for future revenue; hence they must be expensed immediately.

In contrast, other costs such as legal fees, registration fees, and consulting fees can often be capitalized if they are directly attributable to preparing an intangible asset for its intended use. Legal and registration fees are part of the cost necessary to obtain and protect a legal right. Consulting fees can also be capitalized if they directly contribute to the development or enhancement of an intangible asset. This distinction underscores the rationale behind the treatment of research and development costs as an expense rather than a capitalized asset.