What are the incentives for a manager to report

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Question - Research and development costs can be recorded differently according to International Accounting Standards. Research is recognized as an expense of the period and development expense can be capitalized.

With respect to research and development:

a) How does recording innovation expenses as research rather than development change important ratios related to the income statement and balance sheet figures?

b) What are the incentives for a manager to report an expense as research rather development when both methods are justified applying accounting standards.

Reference no: EM132731074

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