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    Kelly_Egan's Avatar
    Kelly_Egan Posts: 11, Reputation: 1
    New Member
    		  
    #1

    Apr 14, 2007, 12:10 PM
    R & D cost benefits?
    What are the benefits of capitalizing R & D cost?


    I really need some help here.
    Thank you.
    KongTheKonqueror's Avatar
    KongTheKonqueror Posts: 75, Reputation: 13
    Junior Member
    		  
    #2

    Apr 14, 2007, 09:18 PM
    Capitalizing is recognizing an expense across the useful life of a product. Let's assume you are developing a new drug. Instead of incurring the cost of R&D in one year, you would incur the cost of R&D across the useful life of the patent of the drug. Basically it allows you to break up the cost of a product up across several years instead of one year.
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