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?

Answer rating: 100% (QA)

The treatment of research and development RD expenses in accounting can be a complex issue and whether AstraZenecas decision to capitalize and amortiz... View the full answer