This study reviews the literature and the practice of accounting for research and development (R&D) costs from the first reference in 1917 to the current treatment. The conceptual treatment of R&D is compared to current financial accounting rules and explanation of the evolution of the current rules is presented. The economic and social consequences of the current rules which require R&D costs to be expressed are examined. The paper explores possible alternative treatment of R&D costs. As a contrast to U.S. practice, the accounting treatment of R&D costs in other countries is discussed. Given the findings of this paper, a strong case can be made for changing the way that R&D costs are accounted for in the United States.
Nix (1936-), Paul Edward and Nix, David E.
"Historical review of the accounting treatment of research and development costs,"
Accounting Historians Journal: Vol. 19
, Article 3.
Available at: https://egrove.olemiss.edu/aah_journal/vol19/iss1/3