> Now take company N which is a “New Economy company”. It invests $10M in R&D to create software. This software will continue to be useful in the future, but pe

> Now take company N which is a “New Economy company”. It invests $10M in R&D to create software. This software will continue to be useful in the future, but per GAAP accounting, it will expense all of the $10M this year. So in year 1, the impact on earnings of this investment is a $10M expense, and the balance sheet reflects nothing. This is wrong. R&D gets capitalized to the extent it has future benefits. > " In addition, let’s say they spend $10M to acquire recurring revenue customers. They will earn revenue from these customers for many years in the future, but many of the costs are expensed immediately." This is also wrong. Under revenue recognition rule (ASC 606) any costs to acquire customers are recognized on the balance sheet and not expensed immediately. I stopped reading because it's clear the author isn't writing a factual article.