Waveland corporations research and development department

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Waveland Corporation's research and development department has an idea for a project it believes will culminate in a new product that would be very profitable for the company. Because the project will be very expensive, the department requests approval from you, the company controller.

You recognize that corporate profits have been down lately and are hesitant to approve a project that will incur significant expenses that cannot be capitalized due to the requirement of FASB Statement No. 2. You know that if an outside firm is hired to do the work and a patent is obtained for the process, Waveland Corporation can purchase the patent from the outside firm and record the expenditure as an asset. You know that the company's own R&D department is first-rate and are confident that they can do the work well.

Who are the stakeholders in this situation? What are the ethical issues involved? What would you do?

 

Reference no: EM13575548

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