There Is a Concern That Research and Development May Be

Question 20
Multiple Choice

There is a concern that research and development may be reduced as a result of the new requirements in IAS 38 because: A)Companies will not have the cash available to pay for the research expenses up-front. B)Recognising expenses early will allow for larger profits later, which will help smaller firms. C)The 'horizon problem' suggests managers will not invest in long-term projects that do not immediately increase profits. D)Shareholders are only interested in short-term profits and will not be impressed by strategies that attempt to increase the long-term value of their shares.