With reference to the above technical article part 1 example 3 - Adam Co's. May I know why R & D on project Z of $500,000 was not included in capital employed adjustments in 2009 despite being deducted from income in both years. Thanks in anticipation
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EVA
12y ago#1I'm not sure what technical article you are referring to, but it would be usual to add R&D back to P%L and the capital employes. If it's not written off, it must be capitalised.
Technical article on Economic Value Added (EVA)
12y ago#3EVA uses the capital at the start of the financial period. The first R&D expense is during 2009, so that has not been charged to the opening capital of 2009.
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