There Is a Concern That Research and Development May Be

question 6

Multiple Choice

There is a concern that research and development may be reduced as a result of the new requirements in AASB 138 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.
• E) None of the given answers.

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Definitions:

Symptoms

Signs or indications of a condition or disease experienced by an individual, which can vary widely in their presentation and severity.

Courtesy

The showing of politeness in one's attitude and behavior toward others; a polite gesture or remark.

Authoritarianism

A governing system centered on concentrated power and authority, often lacking democratic participation or personal freedoms.

Prejudice

Preconceived opinion or judgment about someone or something that is not based on reason or actual experience.