Capitalize research and development spending and amortize it over its useful life.
Year 1 EBITDA
?
Earnings before interest, taxes, depreciation, and amortization.
$500,000
Amortization falls below the EBITDA line.
Year 1 Net Income
$480,000
Year 1 R&D Asset
$80,000
Capitalized balance, end of Year 1.
Total R&D Spend
$100,000
Data view