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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Harold Engstrom who wrote (1406)	8/6/2000 9:10:28 PM
From: Spekulatius	Read Replies (1) \| Respond to of 52153

I do not favor capitalizing R&D expenditures because its could open the door to balance sheet manipulation. The value of R&D is almost impossible to determine; most R&D does not have any value, unless it is completed (results in a marketable product).Even when the R&D results in an approvable product, its yet not possible to value it , because future cash flows from this product are yet not known. I also fear, that capitalizing R&D would results in many special writeoffs charges to make operating earnings look better. From a cash flow perspective, capitalizing R&D expenditures does not matter anyways, so why go through the effort and complicate the balance sheets ?