In this era of rapidly changing technology research and development (R&D) expe

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%u2019s activeties?