Linking R&D Performance Measurement and Valuation to Corporate Strategy (Portfolio 5312)

Description

The current trend in R&D management is to link R&D to corporate strategy. This linkage typically is created through a company’s performance measurement process. However, the linkage presents challenges because it requires integration of various organizational components and R&D projects have unique qualities and involve new knowledge.

This Portfolio provides information on R&D performance measurement and valuation useful to executives such as the CFO or controller. It explains and contrasts various principles and techniques for measuring performance of R&D projects and departments. U.S. GAAP and IFRS standards are summarized to provide a frame of reference for financial measures that may be relevant to the organization’s performance measurement system.

This Portfolio presents a model of the functions of R&D performance measurement systems and describes R&D metrics (i.e., performance measures) for different purposes. Techniques for valuing the benefits of R&D projects are also described. Additionally, this Portfolio presents real option valuation models and examples of how they are used and demonstrates why real option models may provide the most accurate and useful valuation results for strategy implementation.

This Portfolio may be cited as Bloomberg Tax and Accounting Portfolio 5312, Bremser & Herath, Linking R&D Performance Measurement and Valuation to Corporate Strategy (Accounting Policy and Practice Series).

Table of Contents

I. Background and Scope of Portfolio
II. The Research and Development Performance Measurement Process
III. Research and Development Accounting
IV. Research and Development Performance Measurement Methods and Techniques
V. Research and Development Valuation Models