Question: AstraZeneca has spent $1.5 billion on research and development (R&D) of a new medicine in 2016. AstraZeneca decided to capitalize (i.e., create an asset on

AstraZeneca has spent $1.5 billion on research and development (R&D) of a new medicine in 2016. AstraZeneca decided to capitalize (i.e., create an asset on the balance sheet) $1.5 billion and amortize it over the next 5 years, arguing that the expenditure will benefit the firm for the next 5 years.

Is the management's position correct?

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