Valens Research White Papers – The Impact of Capitalizing R&D | September 8, 2016 Valens Research R&D Is an Investment, Not an Expense – How capitalizing R&D impacts 917 284 6008 understanding corporate profitability (GILD, FB, BA, DHR) In several recent Seeking Alpha articles Valens has posted, questions about R&D Rob Spivey capitalization and R&D investment have come up in the comments section. As such, Managing Director we felt it was worth writing a post about this issue, the theoretical underpinnings 917 284 6008 behind it, and how this impacts companies. Angelica Lim In this article, we highlight the impact of these adjustments for companies such as Research Director Facebook (FB), Gilead Sciences (GILD), Boeing (BA), and Danaher (DHR). Throughout 646 453 7861 the article we provide links so that you can see more about how the companies look Kyle Pinkerton after we adjust the financial statements. To be able to see how company analysis Analyst looks when you make this and other key adjustments to clean up the financial 917 284 6008 statements, and get a better picture of corporate profitability and valuations, click here. To read more about our adjustments, click here, and to understand how we think about analyzing companies, click here.
[email protected] The Problem – Should R&D be treated as an expense or an investment? The problem with Generally Accepted Accounting Principles (GAAP) is that they create inconsistencies when comparing one company to another, and can distort a company ’s true historical profitability. By making adjustments, we aim to remove the Valens Research App financial statement distortions and miscategorizations of GAAP.