This is a good thing. Prior to this, I had to make up a paper explaining why my team was R&D with help from an outside consulting group annually.
It was always a sham. We were building product.
It was always a sham. We were building product.
What has changed is section 174 - previously all software development could be expensed (without any justification needed) and now it must be capitalized.
[0] This is based on working at a company that went through a brief period where we had to do extra tracking to be able to capitalize our time if it was possible, and then reading up on the matter to try and understand what the hell the purpose was. Possible I'm wrong about the matter--I've never been the one doing the finances.
The term generally includes all such costs incident to the development or improvement of a product.