...about R&D costs. FASB ASC 730-10-20 demonstrates the definition of research and development. FASB ASC 730-10-05 stipulates general accounting arrangement to R&D cost. In general, most R&D costs are expensed in the periods incurred, because (1) R&D costs entail a high degree of uncertainty regarding the amount and timing of future benefits, and (2) R&D costs are difficult to match with future revenues due to a lack of direct relationship between R&D costs and future revenues. To determine the treatment of following costs incurred in 2013: a. Salaries of administrative personnel According to ASC 730-10-25-2(b), personnel salaries engaged in R&D activities shall be included in R&D costs. Based on ASC 730-10-25-2(e), a reasonable allocation of indirect costs also shall be included in R&D costs. However, general and administrative costs that are not clearly related to R&D activities shall not be included as R&D costs. According to ASC 730-10-15-4(c), the acquisition, development, or improvement of a process by an entity for use in its selling or administrative activities shall not be considered R&D costs, because such process may be intended to achieve cost reductions as opposed to revenue generation. Therefore, the salaries of administrative personnel shall be considered R&D costs and expensed in the periods incurred if they are directly or indirectly related R&D activities. Otherwise they shall not be included as......
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...Trading R&D failures Advancing ones knowledge based on past failures is vital towards furthering intellectual development. Without understanding as to why something doesn’t work, it would be very unlikely that an efficient goal can be reached. This same concept applies to research and development projects in the modern day industry. Using the knowledge of recent failures is what drives progress and technological advancements. However, discovering failures is insensitive to time, resources, and capital in an ever changing world of product innovation. If knowledge of research and development failures were known to firms prior towards their attempt, product growth would be quicker, less risky and more profitable. A market that traded intellectual failures would be beneficial towards the firm and its stakeholders while improving market efficiency. Since understanding failures is so important towards the progression and advancement of a product, there should be a market in which firms can trade R&D failures. However, this market does not exist. Yet, if we can argue that there are advantages for firms to possess more intellectual knowledge, than this market can have hypothetical value. One of the main reasons why there is currently no market for R&D trading is because it can be advantageous towards a firm’s competition even at a cost. If competitors know how to avoid the mistakes that your firm made than they would save time and resources in the development of a......
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...competencies have allowed PETRONAS to be increasingly accepted as the preferred strategic partner by international companies and the host countries where we operate. This augurs well for the realization of our vision to become a “Leading Oil and Gas Multinational of Choice". PETRONAS was not the first company to extract oil or gas in Malaysia. It was Royal Dutch Shell that began the oil exploration in Sarawak, then under the White Rajahs, at the end of the 19th century. In 1910, the first oil well was drilled in Miri, Sarawak. This became the first oil producing well known as the Grand Old Lady. Shell was still the only oil company in the area in 1963, when the Federation of Malaya, having achieved independence from Britain six years before, united with Sarawak and Sabah, both on the island of Borneo, and became Malaysia. The authorities in the two new states retained their links with Royal Dutch Shell, which brought Malaysia's first offshore oil field on-stream in 1968. RESEARCH AND DEVELOPMENT (R&D) R&D refer those investigate activities leading to the discovery of knowledge (research) and the translation of this new knowledge into marketable product development. Objective of R&D: a) To create or design new products or services b) To find new uses of existing products c) To develop new processes that will help reduce capital and manufacturing cost d) To improve the packaging of existing products In 2012, as a Malaysian knows that......
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...1007/s11151-006-0010-z © Springer 2006 The Determinants of Pharmaceutical R&D Expenditures: Evidence from Japan ¨ JORG C. MAHLICHa and THOMAS ROEDIGER-SCHLUGAb, Economic Policy Department, Austrian Federal Economic Chamber, Wiedner Hauptstrasse 63, A-1045 Vienna, Austria. b Department of Technology Policy, ARC systems research, Donau-City-Strasse 1, A-1220 Vienna, Austria. Author for correspondence. E-mail: email@example.com a Abstract. During the past 20 years, the world pharmaceutical industry has experienced a dramatic increase in R&D intensity. We apply and extend a model developed by Grabowski and Vernon (2000, Journal of Evolutionary Economics, 10, 201–215) with a pooled data sample of the 15 publicly listed Japanese drug ﬁrms for the period 1987– 1998. As in the original study, we ﬁnd expected returns to be an important determinant of R&D spending in the Japanese drug industry, albeit considerably smaller than in the U.S., which is particularly obvious in the case of returns from newly introduced drugs. However, our results are sensitive to econometric model speciﬁcation, in particular to controlling for serial correlation and to a dynamic speciﬁcation of the baseline model. Likewise, estimates on ﬁnancial constraints are sensitive to model speciﬁcation, indicating that Japanese drug ﬁrms face small or no ﬁnancial constraints. Our results are consistent with the general literature on R&D investment behaviour, yet raise some methodological questions......
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...49, NO. 1, FEBRUARY 2002 59 R&D Project Selection Using the Analytic Network Process Laura M. Meade and Adrien Presley Abstract—The analytic network process (ANP) is presented as a potentially valuable method to support the selection of projects in a research and development (R&D) environment. This paper first discusses the requirements of the R&D project selection problem, which requires the allocation of resources to a set of competing and often disparate project proposals. Among the factors complicating this task is the need to make the decision within the framework of an enterprise’s strategic objectives and organizational structure while considering and integrating financial and strategic benefits of each project. The paper discusses the use of the ANP, a general form of Saaty’s analytic hierarchy process, as a model to evaluate the value of competing R&D project proposals. A generic ANP model developed by the authors, which includes in its decision levels the actors involved in the decision, the stages of research, categories of metrics, and individual metrics, is presented. The paper concludes with a case study describing the implementation of this model at a small high-tech company, including data based on the actual use of the decision making model. Index Terms—Analytic hierarchy process, analytic network process, multicriteria decision making, project selection, R&D management, R&D projects. I. INTRODUCTION OR MANY firms, especially those that depend on......
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... Article Review Managing the New Product Development process: Strategic Imperatives Aditi Rana Ankita Khaniya Ashish Silwal Sujal Dhungana Managing Operations and Technology, MBA Term II Arjun Shrestha February 24, 2013 Background: Published by “Academy of Management”, Melissa A. Schilling and Charles W. L. Hill have co-authored the article is “Managing the New Product Development process: Strategic Imperatives”. This article has been extracted from “The Academy of Management Executive (1993-2005), Vol. 12, No. 3 (Aug., 1998), pp. 67-81”. “Managing the new product development process: Strategic imperatives” explores into the new product development (NPD) process and the strategies involved with it. Unprecedented importance goes into the study and implementation of the NPD process by various departments of businesses, and it has become a key driver of competition between firms in majority of industries. Researchers have tried to conclude on strategies that could be key to enhance the NPD process. Two major factors have been found to go into consideration for the creation of those strategies: maximizing the fit of products/services with customer needs, and, minimizing the lead-time to the market. Although it may appear that these two factors might create conflicting mandates in a business; researchers have increasingly found indications that businesses may...
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...The Effect of “Front-Loading” Problem-Solving on Product Development Performance Stefan Thomke and Takahiro Fujimoto In recent years, there has been a growing interest in the link between problemsolving capabilities and product development performance. In this article, the authors apply a problem-solving perspective to the management of product development and suggest how shifting the identification and solving of problems—a concept that they define as front-loading—can reduce development time and cost and thus free up resources to be more innovative in the marketplace. The authors develop a framework of front-loading problem-solving and present related examples and case evidence from development practice. These examples include Boeing’s and Chrysler’s experience with the use of “digital mock-ups” to identify interference problems that are very costly to solve if identified further downstream—sometimes as late as during or—after first full-scale assembly. In the article, the authors propose that front-loading can be achieved using a number of different approaches, two of which are discussed in detail: (1) projectto-project knowledge transfer—leverage previous projects by transferring problem and solution-specific information to new projects; and (2) rapid problemsolving—leverage advanced technologies and methods to increase the overall rate at which development problems are identified and solved. Methods for improving project-to-project knowledge transfer include the......
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... MNC R&D in ireland: the medical sector By Martin Ronan A Thesis Submitted for the Degree of Bachelors in Business Administration Galway Business School Research Supervisor: Dr. Johanna Fahy May 2010 Abstract Penrose (1995) states that R&D is “the deliberate investigation of the as yet unknown properties of the materials and machines used in production (or as yet undeveloped ways of using them) for the express purpose of improving existing or creating new products and productive processes”. (p112) This study explores the level of R&D in the medical sector in Galway, because R&D is seen as of paramount importance to the sustainability of the sector in the West of Ireland. Galway, in particular, has become a nucleus for the medical sector with a considerable number of companies operating there (Fitzgerald, 2007; Stommen, 2005; Harvey, 2001). The research was conducted using primary research methods and additional information was acquired through extensive literature review. Qualitative interviews were conducted with senior R&D professionals to ascertain the degree of penetration of R&D practices in the sector. The findings of the research suggested that a high level of R&D exists in the sector and that its importance is valued by policymakers. The four companies interviewed all demonstrated high levels of R&D......
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...Innovation: Product innovation is the creation and subsequent introduction of a good or service that is either new, or improved on previous goods or services. Product innovation is defined as: the development of new products, changes in design of established products, or use of new materials or components in the manufacture of established products Thus product innovation can be divided into two categories of innovation: development of new products, and improvement of existing products. Systemmatic Innovation of Products includes: * Technology strategy * Design thinking skills * Customer needs analysis * Systematic creativity methods * Market and pricing strategy * Design for environmental sustainability * Design of services * Capturing value from innovation * Development process design * Product and service leadership * R&D organization and teams * Managing complex technical projects * The future of design process and culture The development and market introduction of a new, redesigned or substantially improved good or service. might include a new product's invention; technical specification and quality improvements made to a product; or the inclusion of newcomponents, materials or desirable functions into an existing product. Meaning of New Product Development: Product development is a broad field of endeavor dealing with the design, creation, and marketing of new products. Sometimes referred to as new......
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...Toyota’s research & development has today made a separate platform for itself in this global arena. It has dedicated itself towards the development of attractive, affordable & high-quality products for customers throughout the world. The intellectual property that R&D generates is a vital management resource that Toyota utilizes and protects to maximize its corporate value. R&D PRINCIPLES * Providing clean and safe products and enhancing the quality of life of people everywhere through all our activities. * Pursuing advanced technological development in a wide range of fields, we pledge to provide attractive products and services that respond to the needs of customers worldwide. In fiscal 2012, R&D expenses totaled ¥779.8 billion, up 6.8% from the previous fiscal year, representing 4.2% of consolidated net revenues. The company has been constantly increasing its total revenues as it grows older. We worked closely with suppliers to develop components and products more efficiently and took steps to reduce our own R&D expenses. At the same time, we plan to continue making substantial investments in R&D involving forward-looking, leading-edge technologies and the development of products associated with the environment, energy, and safety. These investments are essential to preserving our competitive edge in terms of technologies and products. INTELLECTUAL PROPERTY STRATEGIES Toyota carefully analyzes patents and the need......
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...1Topic is about Research and Development expenditure under US GAAP and IFRS. I’m going to be focusing on internally generated costs Why companies investing in R&D Slide 2: It’s hard for companies to stay competitive to their competitor in their industry if they can’t hold the latest and most innovative technology. So investing in R&D helps companies stay competitive Business performances: statically, in a survey in Canada in 2007, 44% of ideas of innovation come from the source of R&D. Thus, R&D help improve business performance. Slide 3How companies in US and the world are investing in R&D? In US, for the year 2014 to come, US companies are expected to spend $ 465 billion into R&D activities; it means 2.7% percent of US GDP. On the Europe side, company like Volkswagen spends $13.5 billion, Novartis spends $9.9 billions. That’s huge amount of money, thus it requires an appropriate accounting treatment for these costs. Slide 4: Both US GAAP and IFRS recognize the importance of appropriate accounting treatment for R&D activities but take a different viewpoint on the method should be used. It’s clear that if future economic benefit gonna flow into the entity as the result of R&D activities. These cost should be classified as asset rather than expense. But whether future economic benefit are certain to flow into entity are impossible to predict. Thus the difference between GAAP and IFRS arise Slide 5: Talk about how US GAAP account for R&D cost. The accounting......
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...forecast 3 ............................................................................................................... 8 Strategy 3: Take advantage of new products generations. ..................................................... 8 Economic forecast 4 ............................................................................................................... 9 Strategy 4: New generation of custom, reduce costs for components. .................................. 9 Economic forecast 5 ............................................................................................................. 10 Strategy 5: Try to clear the components inventory accumulated and benefit from custom . 10 3. 4. What we did well? ............................................................................................................ 11 What went wrong? ............................................................................................................ 11 1. What did Marketing and Sales department do? With the goal of increasing product sales and compete with other three company, Marketing and Sales department played an important roles in determining company’s competitive advantage. As the group begins to work together, we need a solid plan to maximize profits while creating good brand image and adding value to our products. The department also in charge of training the salesmen in a knowledge of the goods and in methods of selling them, supervises and directs the sales......
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...C. M E R L E C R A W F O R D STRATEGIES FOR NEW PRODUCT DEVELOPMENT Guidelines for a critical company problem C. Merle Crawford is a faculty m e m b e r at the University o f Michigan. In spite o f much evidence o f its success, many managers hesitate to establish a policy for new product development. Their indecision often arises f r o m two reasons: they fear that a defined strategy may discourage innovation and they are uncertain how to formulate a new product strategy. The author o f this article discredits the f o r m e r notion and, in reply to the latter, proposes the guidelines f o r developing such a statement. As new products are essential to the continued success o f most firms, the strategy must exist and must be operant i f the firm is to avoid wasted time, effort, and money as well as employee confusion and discouragement. For longer than most of us care to remember, Dan Gerber has been proclaiming that babies are his business, his only business. With some nostalgic regret I read recently that he has altered his strategy: he now permits limited diversification b e y o n d products for babies. A leading toiletries manufacturer has an equally tenacious, though unpublicized, commitment to only those new, nonfood, packaged goods that do not compete itemto-item with Procter and Gamble. Richard Rifenburgh, president of Mohawk Data Sciences, manufacturers of peripheral computer equipment, was cited recently in Fortune as a man who, at the present time, would...
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...solutions do you see to resolve the key problems in the Balkan Region?
• What would be your recommendations for the longer term, taking into account the different
• Please include your suggestions to improve the audit process in the future.
In total, you have 90 minutes for this Case Study. Please answer as precisely as you can and write as
clearly as possible.
Today is Friday, 29 June 200X
Last year was 200X-1, next year will be 200X+1
Mock Case Study Exercise
Community Assistance for Reconstruction, Development and Stabilisation
The Council of the European Union
Directorate-General for Enlargement
European Court of Auditors
European Reconstruction and Development Office
EU Justice Affairs
Instrument for Pre-Accession Assistance
Mock Case Study Exercise
Evie Christoffelsen, Head of Unit, Directorate for the Balkan Region, DG ELARG
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...GLOBAL R&D GLOBAL R&D I. Introduction Many have noticed that functions previously held in Western countries are now being transferred to countries with cheaper labor such as IT support now done in India (neoIT, 2007) and the People’s Republic of China is nowadays by some referred to as ‘the factory of the world’ (Chang 2006). China’s WTO accession accelerates the trend giving hope for a greater market access and a more predictable commercial environment. In 1984, 3M established its China branch and was the first foreign-invested enterprise established outside the Shenzhen special economic zone. Then, the US multinational 3M Company developed its business and worked on developing a research and development (R&D) center in Shanghai like many other MNCS (158th set up in Shanghai by multinationals). Recently, 3M even doubled its China's R&D center size and staffing, giving birth to an important R&D hub for 3M's global business enabling the company to better supply products needed in the industries of electronics, telecommunications, automobiles, shipping, aviation, medical care, housing and leisure," company officials said. Today, 3M has 11 companies and 19 offices across the country, employing more than 5,000, showing a long-term commitment for the Chinese market. Through those trends, we can notice how R&D is now important in the globalization process. Li-Hua and Khalil (2006) argue that the international business environment is......
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