Reference no: EM13999085

The focus of this case is the situation described in Case 10-9. What is the appropriate accounting for R&D costs? Do you believe that 

(1) Capitalization is the correct treatment of R&D costs, 
(2) Expensing is the correct treatment of R&D costs, or 
(3) That companies should be allowed to choose between expensing and capitalizing R&D costs?

Required:

1. Develop a list of arguments in support of your view prior to the class session for which the case is assigned. Do not be influenced by the method required by the FASB. Base your opinion on the conceptual merit of the options.

2. In class, your instructor will pair you (and everyone else) with a classmate who also has independently developed a position.

a. You will be given three minutes to argue your view to your partner. Your partner likewise will be given three minutes to argue his or her view to you. During these three-minute presentations, the listening partner is not permitted to speak.

b. Then after each person has had a turn attempting to convince his or her partner, the two partners will have a three-minute discussion in which they will decide which alternative is more convincing and arguments will be merged into a single view for each pair.

3. After the allotted time, a spokesperson for each of the three alternatives will be selected by the instructor. Each spokesperson will field arguments from the class as to the appropriate alternative. The class will then discuss the merits of the alternatives and attempt to reach a consensus view, though a consensus is not necessary.