research and development costs

Research and Development Costs

The costs a company incurs in process of developing new goods and services to best suit the company's and consumer needs. For example, a vacuum cleaner company may spend a significant amount of money researching and developing profitable vacuum cleaner improvements. The costs decrease the company's profit in the short term but create the potential for higher profits in the medium and long term. As a result, many analysts consider it a positive sign when companies devote a large amount to their research and development costs.

research and development costs (R&D costs)

The costs that are incurred during the development and introduction of new products to market or during the improvement of existing products. Although R&D costs tend to penalize current profits, they eventually benefit the firm's future profits when new products developed as a result of the research become profitable themselves. Many analysts regard a high proportion of sales revenue devoted to R&D as a positive sign relative to a firm's profit potential and future stock price.
References in periodicals archive ?
In fact, about one third of all potential drugs fail pre-clinical or clinical trials due to the toxic nature of the compounds being tested, accounting for an estimated $70 million (20%) of total research and development costs per drug.
apportioning research and development costs in advance of specific projects is very difficult;
5) See the cases cited in Swanson, Tax Treatment of Research and Experimentation Expenditures, 34 Taxes 541 (1956), and Miller, Research and Development Costs, N.
Other than the write-off of in-process research and development costs discussed above, Allergan does not anticipate that the Oculex acquisition will have an impact on its previously stated 2003 adjusted earnings per share guidance of $2.
Despite rising research and development costs associated with new drugs, newly published research shows that the top 10 percent of newly marketed drugs account for half of the financial returns on all new drug development, and only one-third of newly introduced drugs generate earnings that exceed average R&D costs.
Commenting on the initiative, Duraswitch President and CEO Bob Brilon stated, "Over the last year, we have reduced selling, general and administrative costs as well as research and development costs and continued to build upon our core technologies.
Research and development costs were $4,063,480 for the quarter ended June 30, 2001 compared to $2,265,504 for the same period in 2000.
Research and development costs were $7,325,709 for the six months ended June 30, 2001 compared to $3,664,926 for the same period in 2000.
The Company incurred $127,427 and $185,097 of research and development costs for the three and six months ending June 30, 2000, respectively; compared to $0 spent over the same period in 1999.
The accounting loss for the six-month period was primarily due to research and development costs associated with the Company's new NEBS-400(TM) product line.
Full browser ?