U.S. GAAP requires firms to expense immediately all internal expenditures for R&D costs. Alternatively, GAAP could require

Question:

U.S. requires firms to expense immediately all internal expenditures for R&D costs. Alternatively, could require firms to capitalize and subsequently amortize all internal expenditures on R&D that have future potential. Why have standard setters chosen not to allow the capitalization alternative? How would analysts be better served if required capitalization of R&D costs?

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...