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Assume that the FASB issues a proposal to change accounting for R&D costs from expense to capitalization. Required: 1. What does it mean to capitalize
Assume that the FASB issues a proposal to change accounting for R&D costs from expense to capitalization. Required: 1. What does it mean to capitalize versus expense R&D costs? 2. Provide an accounting justification for expensing R&D costs. 3. Provide an accounting justification for capitalizing R&D costs. 4. Briefly describe the types of firms that would be likely to respond to the FASB?s proposal. 5. Assume you are a manager of the firm you described in Requirement 4 and that you believe in economic consequences. Would you support or oppose this FASB proposal? Explain. 6. Assume you are a manager of the firm you described in Requirement 4 and that you believe markets are efficient as to accounting. How would you respond to the FASB?s proposal? Explain
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