Why are research and development costs expensed? Is this consistent with how other similar costs are handled? Why or why not? Should research and development costs be expensed? Why or why not?
1. In the United States, companies must charge expenditures for research and development directly to expense. In some other countries companies can recognize such cost as assets. Suppose you were a manager of a research and development department. Which method of accounting for research and development would be most consistent with the informaition you use for decision making? Explain.
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