Chapter 7 of the textbook presents some concerns regarding the current accounting standards for research and development expenditures. Instructions: For this discussion, you will be divided into two groups: Group B: You are assigned to Group B if you have a last name beginning with N-Z. Assume that you are the FASB member. Write a memo defending the current standards regarding research and development. For both groups, your memo should address the following questions: By requiring expensing of R&D, do you think companies will spend less on R&D? Why or why not? What are the possible implications for the competitiveness of U.S. companies? If a company makes a commitment to spend money for R&D, it must believe it has future benefits. Shouldn't these costs therefore be capitalized just like the purchase of any long-lived asset that you believe will have future benefits? Explain your answer. For your initial post, indicate in the subject line which group you are in (Group A or Group B). For your two peer reply posts, choose posts from students who are in the opposite group and respond to the points made in their memos. You may agree, disagree, play Devil’s Advocate, or pose questions. However, your initial post and peer replies should be logical and supported by evidence.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Chapter 7 of the textbook presents some concerns regarding the current accounting standards for research and development expenditures.

Instructions: For this discussion, you will be divided into two groups:

Group B: You are assigned to Group B if you have a last name beginning with N-Z. Assume that you are the FASB member. Write a memo defending the current standards regarding research and development.

For both groups, your memo should address the following questions:

By requiring expensing of R&D, do you think companies will spend less on R&D? Why or why not? What are the possible implications for the competitiveness of U.S. companies?
If a company makes a commitment to spend money for R&D, it must believe it has future benefits. Shouldn't these costs therefore be capitalized just like the purchase of any long-lived asset that you believe will have future benefits? Explain your answer.

For your initial post, indicate in the subject line which group you are in (Group A or Group B). For your two peer reply posts, choose posts from students who are in the opposite group and respond to the points made in their memos. You may agree, disagree, play Devil’s Advocate, or pose questions. However, your initial post and peer replies should be logical and supported by evidence.

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