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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: X-Ray Man who wrote (8678)	6/25/1998 9:20:00 PM
From: Reginald Middleton	Respond to of 74651

<R&D is not an investment. Investments are listed as assets after they are expensed.> It is this mindset that supports my point of the abandonment of accounting earnings. If R&D is an expense, like support costs, why do the prospects of future earnings increase with marketing and R&D, yet not so with support costs. When they are expensed (R&D) is an accounting mechanism and does not reflect reality. The cost of R&D is borne when the R&D is done, period. It does not matter when you decide to write it down on a piece of paper (except for purposed of increasing cash flow by avoiding taxes or increasing accounting earnings by capitalizing inappropriately - GAAP doesn't allow this).