The U.S. law regarding research and development is problematic because it does not view such R&D as an asset. Yet, the money spent on R&D, in particular during the development stage, functions as an asset does. The investment is made in the early years, with the economic payoff coming later. If the R&D was a physical asset with these characteristics, it could be capitalized. Thus, the inability of American companies to do this represents a distortion in the financial statements -- the investor would benefit if all investments leading to specific payoffs could be treated the same (amortized).
In order to rectify the situation with respect to research and development, GAAP should move towards the international standard. Current U.S. law is a hodge-podge of different rules, which not only lacks clarity but also creates the aforementioned distortion. The move towards the international standard would allow the accounting professional and U.S. companies to reasonably determine a cutoff point where investment in research ceases to be broad (rightly classed as an expense) and begins to be an asset (wherein development costs are amortized).
Ideally, the move towards the international standard would be part of a greater shift towards better recognition of intangible assets on the balance sheet. Research and development that leads to intellectual property differs little to the investor from investment in physical assets. They both represent the same thing -- money spent that will generate...
356). To date, there has been a great deal of reluctance to adopt a harm reduction approach in the United States for two fundamental reasons: The first reason stems from the argument that if harm were reduced for users the result would be an increase in the prevalence of drug use and, therefore, increased harm to society in terms of health care costs and violent crime. Those taking this position present
reporting of capital and operating leases and their impact on fair value measurements. The essay surveys lease accounting standards from 1976 thru the present. The basic principle of lease accounting is that some leases are merely rentals, while others are in effect purchases. U.S. regulations that specify lease accounting rules are issued by the Financial Accounting Standards Board (FASB). The primary FASB statement on leases was Number 13, issued in
The lenders loan funds to the lessor but look to the credit of the lessee and the equipment value in the event of default. In other words, the lending is non-recourse as the lessor is not responsible to repay the loan in the event of default. The lender has some protection in that its claim does precede the lessor's claim in the event of default. The power of the leverage
New Rules for Lease Accounting: The Controversy The Accounting Lease Controversy The Advantages of the new system Voices Against the New Lease Accounting Model The Accounting Lease Controversy The International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) jointly issued exposure drafts on August 17, 2010 proposing a new lease accounting paradigm. The EDs propose changes to simplify lease accounting and improve transparency. The new lease accounting model is based on
blanket media coverage of U.S.-Iraq war has forced many other important national and international issues in the background. One of these is the controversial policy of the U.S. government regarding the prisoners kept in the Guantanamo Bay camps without trial. In this paper about the Guantanamo bay prisoners we shall explore the conditions under which they are kept, their rights under international and U.S. law, the possibility that some
IAS 17 Leases Explain the key features of the current accounting standard. You should use at least one illustrative example for lessee accounting from a published set of financial statements to illustrate the effect of the standard IAS 17 accounting standard establishes and elucidates the pertinent accounting procedures and also disclosures that are supposed to be employed in accounting by lessors and also lessees. The lessor is the owner of the underlying
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