Research and Development Write For Us

The term research and development (R&D) describes a range of activities companies undertake to develop innovations and introduce new products and services. Research and development is usually the first phase of the development process. Companies need knowledge, talent and investment to meet their R&D needs and goals. Research and development aims to bring new products and services to market and contribute to the company’s bottom line.

Types of Research and Development

There are different types of research and development in business and government. The type used depends entirely on the body’s performance and the results may vary.

Basic Investigation

There are incubators and accelerators where companies invest in startups and provide financial support and advice to entrepreneurs, hoping that it will result in innovations that they can use to their advantage.

Mergers, acquisitions, and partnerships are also forms of research and development in which companies join forces to leverage other companies’ institutional knowledge and talent.

Applied Research

An R&D model is a department composed primarily of engineers who develop new products, a task that typically requires extensive research. There is no specific goal or application in this model. Rather, research remains carried out for the sake of research.

Research for Development

This model involves a department composed of scientists or industrial researchers, all tasked with conducting applied research in technical, scientific or industrial fields. This model facilitates the development of future products or the improvement of current products and/or operations.

R&D Accounting

Research and development can positively impact a company’s bottom line, but is considered a cost. After all, companies spend significant amounts of money on research and developing new products and services. Therefore, these expenses are often reported on the income statement for accounting purposes and have no long-term value.

In certain situations, R&D costs are capitalized and recorded on the balance sheet. Some examples include:

• Materials, fixed assets or other assets have alternative future uses with an estimated value and useful life.
• Software that can be converted or deployed elsewhere in the organization to have a useful life beyond a specific R&D project.
• Indirect costs or overhead costs that remain shared between projects.
• Research and development acquired from a third party with an intangible value. This intangible asset can be recorded separately on the balance sheet.

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