AGILE IN ACTION

R&D expenditure can expensed or capitalised. When it's expensed, the total expenditure is declared as expense in the current period, reducing current profits by that amount. When it's capitalised, part of the expenditure is declared as expense in the current period and part is declared as expense in future periods, increasing current profits and reducing future profits. Capitalisation can provide a signal to investors about future benefits of current R&D projects, whereas expensing can reveal strategic information about R&D to competitors. I'm not an accountant and I admit there's much more to this than I currently understand, but I'm wondering if the motivation to use capitalisation is to give the perception of greater current profits. Is this short-termism?