Sir when calculating ROCE for any project, we need initial capital investment. But does that initial capital investment figure includes capitalised expenditure on R&D? I think it should not as R&D expenses are sunk costs but my study text seems to suggest otherwise... could you shed some light on this sir?
Ask the Tutor ACCA FM
ROCE
5y ago#1Because ROCE is an accounts based measure, we include all expenditure that will be capitalised on the SOFP.
Sign in to reply to this topic.