Advanced Accouting: Worldwide Accounting Diversity and International Standards

Jun 25th, 2015
Price: $10 USD

Question description

 Which Accounting Method Really Is Appropriate?

In this era of rapidly changing technology, research and development (R&D) expenditures represent one of the most important factors in the future success of many companies. Organizations that spend too little on R&D risk being left behind by the competition. Conversely, companies that spend too much may waste money or not be able to make efficient use of the results.

In the United States, all R&D expenditures are expensed as incurred. However, expensing all R&D costs is not an approach used in much of the world. Firms using IFRS must capitalize development costs as an intangible asset when they can demonstrate (1) the technical feasibility of completing the project, (2) the intention to complete the project, (3) the ability to use or sell the intangible asset, (4) how the intangible asset will generate future benefits, (5) the availability of adequate resources to complete the asset, and (6) the ability to measure development costs associated with the intangible asset.

Should any portion of R&D costs be capitalized? Is expensing all R&D expenditures the best method of reporting these costs? Is the U.S. approach better than the international standard? Which approach provides the best representation of the company’s activities?

Tutor Answer

(Top Tutor) Daniel C.
School: UCLA

Studypool has helped 1,244,100 students

Review from our student for this Answer

Jun 27th, 2015
"Goes above and beyond expectations !"
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1819 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors