Just my two-cents. If we refer to the IFRS:

Initial recognition: research and development costs

Charge all research cost to expense. [IAS 38.54] Development costs are capitalised only after technical and commercial feasibility of the asset for sale or use have been established. This means that the entity must intend and be able to complete the intangible asset and either use it or sell it and be able to demonstrate how the asset will generate future economic benefits. [IAS 38.57]

As shown above, R&D costs could be capitalized as long as they are feasible for use or sale. The company just needs to demonstrate this.

For goodwill, sometimes it’s quite difficult to reliably measure the value of internally generated goodwill. A different matter for goodwill acquired in a business combination as we could use the transaction price.

As for customer acquisition costs, costs incurred related to contracts to those customers could be capitalized based on IFRS 15.

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I was really hoping to read something insightful but instead, all I got from the first 3 pages or so were basically baby arguments. Not to mention the errors abound within the literature. One needs to understand the standard setting processes and also financial history and the impact of frauds on the global economy before delving into such issues as the relevancy of standards and financial statements. For correction on one or perhaps two things you spoke of, 1) software costs are capitalized once technological feasibility is achieved., 2) SFAS 2 was replaced and incorporated into another SFAS, I believe it was either SFAS 5 or 8.

Also, FASB adopts a conservative approach in reporting financial transactions as a fundamental concept. This concept helps both the SEC and FASB to keep control on scrupulous entities and prevent them from misleading and defrauding investors.

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Don't all these issues disappear if you look at cash flow instead of income? Then you can compare like for like, no?

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How about just not using two statements for your financial analysis and getting behind the idea of non-GAAP measures in the financials. If they don’t currently disclose, there’s probably a reason.

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Another good resource on this topic is the book "Capitalism Without Capital"

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