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Microcap & Penny Stocks : MYSYF: Mercury Scheduling Systems (software)
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To: Marshall who wrote (7)3/12/2000 3:57:00 PM
From: WTSherman  Read Replies (1) of 23
 
<One thing I do know - you don't go writing off all of your engineer's salaries as R&D, most usually fall under the General and administrative expenses.<

I don't know where you get this idea, but, generally its not true. Especially, in s/w co's the cost of product development(which is almost all personnel related) is accounted for as an R&D expense. Costs related to engineers who do custom development or consulting will be tacked on the cost of goods for "services" and engineers used for support will be counted among the general admin costs. There are fairly explicit accounting rules for these practices.

You can look at the financials of any major s/w company and see this(ORCL, MSFT). The same applies with mid-size and small company's. A perfect example is I2 Tech(ITWO). Their SEC filings make very clear what their R&D expenditures consist of and how they are accounting for them.

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