A company can buy another company to obtain its technology but the accounting treatment for that acquired technology would be different

A company can buy another company to obtain its technology but the accounting treatment for that acquired technology would be different. It would be based on the criteria whether it is a developed technology or it is still in the process of research and development. To determine if it is a developed technology, we have to check its technological feasibility i.e. whether the design and detailed program design has been completed or not. If the technological practicability has been achieved, it would be recorded as an asset and amortized till the period it would start providing benefits. However, if the technology is still going through the process of R&D, it would be treated differently and accordingly. The amount allocated during the period of attainment of technology would be expensed and the purchased technology would be rendered as an indefinable asset which would be tested over the period of time.