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Essay / Research Paper Abstract
This 6 page paper examines issues related with discretionary costs, paying particular interest to research and development costs. The writer discusses what they are and how they occur as well as how they are accounted for, looking at their treatment as either operational costs or capitalized costs. The bibliography cites 5 sources.
Page Count:
6 pages (~225 words per page)
File: TS14_TERDcosts.rtf
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Unformatted sample text from the term paper:
are referred to as discretionary as they do not have to take place in a specific period. Discretionary costs can include costs such as marketing and advertising, repairs and maintenance
and equipment replacement, training and of research and development (Elliott and Elliott, 2005). Each of these costs may be postponed from one year to the next, and the costs which
are often decreased when a company is facing hardship in order to reduce the overall cost of the company (Battacharya, 2005). It is easy to management to change plans for
these types of cost, delaying the renewing of equipment and maintenance in order to reduce costs, delaying a marketing exercise in order to postpone the expenses into the following years
accounts. This is what is referred to as discretionary; it is up to management whether or not to undertake actions which incurred as expenses. Generally speaking, when discretionary costs of
disposable decreased there is likely to be a negative impact on the load interests of the company. There are often choices to be
made in terms of accounting policies regarding the way that some of these discretionary expenses are dealt with in the accounts. In many instances discretionary costs will be seen as
general operating costs and expense within the existing period. In this respect, the higher the discretionary costs and lower the profit after the deduction of those costs. It is usual
for maintenance costs to be expensed in the current accounting period, as well as marketing. However, there is also the potential to do so expensing of these costs, instead capitalizing
the costs over the expected life of the items expenditure. Capitalization is usually undertaken where equipment is purchase which is expected to
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