Research and Development
Many entities charge research and development costs to expense when incurred. Other entities capitalize such expenditures forward as assets and amortized them over future periods.
The differences between them are material as it will affect the profit in the operating year. Choosing °•expense°¶ means that the profit for that operating year will be decreased and the profit for the subsequent years will be increased. In contrast, °•capitalize°¶ means that certain expense will decrease the profits over the periods.
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