Financial reporting requires firms to expense immediately all research and development costs (R&D) costs. Alternatively, GAAP could require firms to capitalize and subsequently amortize all expenditures on R&D that have future potential. As a third alternative, GAAP could require firms to take a "successful efforts" approach to R&D, capitalizing all R&D expenditures as assets and then writing these costs off when it is apparent the efforts are unsuccessful. Speculate why standard setters have chosen not to allow the two latter reporting options and discuss whether analysts would be better served if GAAP required capitalization of R&D costs.