EVA & Amortization of R&D

 
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EVA & Amortization of R&D
asad shah
The amortization of R&D on straight line basis does not justify the concept of equal opportunity through out the life of amortization and it seems to be more biased towards the earlier years of product. We know that companies get maximum benefits from R&D in the earlier years and with the passage of time the advantage starts diminishing as the competitors or company itself can come up with the new R&D. Therefore in the later years of a product the company bears the R&D presence in its books but the real advantage does not hold good in these years. Therefore I think that the amortization should be larger in the earlier years of R&D. 		 

 
Other view
Ritesh
As the name suggests, it's R&D. R&D in lay man terms means hit and trial with the technology. Even a hit rate of single digit % would be considered as...Sign up
 

   
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