Capitalizing R&D - Webcast
Originally published: 25/10/2016 12:16
Publication number: ELQ-88287-1
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Capitalizing R&D - Webcast

Learn how to capitalize R&D instead of having it as an operating expense.

R&D is really capital expenditures (for technology and pharmaceutical companies) but accountants treat it as operating expenses. In this webcast, I look at the process of capitalizing R&D and how it affects earnings and reinvestment rates.

I use Microsoft to illustrate the process.

The spreadsheet converts R&D expenses from operating to capital expenses. It makes the appropriate adjustments to operating income, net income, the book value of assets and the book value of equity.
(It can also be used to convert other intangible assets, such as human capital, into capital invested.

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (

This Best Practice includes
1 Excel Model, 2 10K Microsoft Statements, 1 Webcast Video

Prof. Aswath Damodaran offers you this Best Practice for free!

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