What is included in R&D expenses and how are they accounted for?

Hello dear readers of the seoslim.ru blog! We continue to consider unusual definitions, abbreviations and other words of the Russian language and today we will analyze one popular abbreviation.

R&D (research and development work) is a set of works necessary to obtain the necessary knowledge and practical application in product development.

R&D reduces enterprise costs and provides new knowledge.

If you want to know even more information, do not close the page.

What is R&D: definition and features

The term R&D stands for research and development work. This is a set of experiments, theoretical ideas, searches, production of standard samples, a set of activities aimed at producing a finished product according to given standards.

The scale of R&D reflects the competitiveness of companies, and the costs of this type of service are an indicator of the innovative activity of the manufacturing enterprise. Thus, it is possible to calculate the competitiveness of a particular product at the development stage.

Scientific research is often resorted to in the manufacture of government-ordered products. In this case, the activities are financed by the state, which presupposes strict adherence to the established plan, consisting of several stages. Conducting R&D involves the involvement of specialists in a particular field and the presence of strict time frames.

Researchers identify the following most common activities and types of effective R&D services:

• Intellectual activity, experiments, theoretical research (research);
• Work aimed at developing design and technological documentation of a product sample (R&D);
• Other research activities, the task of which is to obtain new knowledge and skills in a specific area;
• Technological processes (TP).

The difference between research and development work and other types of activities in industry is the widespread use of modern technologies and developments.

Novelty is the hallmark of any R&D. The output is a product that has no analogues (this can be a new type of technology, product or service).

R&D: preparing a feasibility study

Resource-time planning of work and its economic assessment are very important when deciding to conduct R&D. Most often we are talking about researching or designing a fundamentally new device, upgrading an existing one, conducting an experiment, developing algorithms, programs, etc. The cost of a mistake can be high, so it is necessary to prepare a comprehensive justification. How to do this, the stages of organizing and planning R&D, and the approach to the economic justification of decisions will be discussed in our material.

To make an objective management decision on R&D, it is necessary to prepare a justification that can consider the following points:

• description of R&D options;
• determination of stages and phases of R&D according to options;
• determination of labor intensity and duration of stages according to options;
• drawing up a schedule for R&D implementation options and its optimization;
• calculation of R&D costs by options;
• choosing the most effective option for conducting R&D.

The justification must reflect: the technical and economic feasibility of performing R&D, as well as the economic results obtained from their implementation by the enterprise.

To visualize such extensive analytics, it is better to use graphic material, which should minimally include:

• strip or network schedule for the implementation of the selected R&D option;
• a graph of cost increases during the R&D process, diagrams (histograms) of the cost structure by options or stages of R&D;
• table of technical and economic indicators of R&D.

Feasibility study (TES) of an R&D option

It is recommended to start a feasibility study with a description of the organizational conditions for carrying out R&D: location, teams of performers (organizations, departments, groups, etc.), principles of organizing work, identifying possible alternatives. Next, for each of the alternative options for conducting R&D, the execution time is calculated with the drawing up of a schedule, implementation costs, the economic efficiency of the options is assessed, and recommendations are made.

Determining the timing of R&D

First, a differentiated list of works is drawn up for all stages of R&D, taking into account their specifics.

Typical list of research stages:

• terms of reference for research;
• choice of research direction;
• preparation of experimental base;
• theoretical and experimental research;
• generalization and evaluation of research results.

Typical list of OCD stages:

• terms of reference for R&D;
• Technical Proposal;
• preliminary design;
• technical design;
• detailed design and preparation of technical documentation.

If it is intended to create a prototype, then additional steps are introduced:

• production of a prototype;
• prototype testing;
• finalization of the project based on test results.

To plan the duration of R&D, you can use calculation and experimental-statistical standards. However, for a significant part of the work such standards are absent1 or unavailable. Therefore, an expert determination of the labor intensity of the work or the time it takes to complete it with a set number of performers is often used. The responsible executive or a group of specialists acts as an expert. The results of the assessment are not considered as an obligation of the responsible person, but as a proposal based on experience, intuition and taking into account factors affecting the duration of the work.

Estimation of the duration of work can be one-, two- or three-point.

Experts can directly assess the expected duration (TD) of work as the most probable value given a certain number of performers involved in its implementation (single-point assessment).

In the case of a two-point assessment, the minimum (Tmin) and maximum (Tmax) duration of work (i) is determined. The minimum duration implies the most favorable set of circumstances (no interruptions in work, adjustments, etc.), the maximum - on the contrary, the least favorable. The expected completion time will be:

Also = (3 × Тmini + 2 × Тmaxi) / 5.

With a three-point assessment, a forecast is given for the minimum and maximum, as well as the most probable (Tnv) duration of work; the expected time can be calculated as:

Also = (Tmini + 4 × Tnbi + Tmaxi) / 6.

Methodology for determining the duration of work based on labor intensity

When using labor intensity2 (τ, person-days) of work (i), its duration (T) is calculated in weeks or months using the formula:

Тi = τi / Ri × Fpl × Kvn, where

Ri — number of performers of work (i), people;

Fpl - the planned fund of working time of the performer for the period in working days for the calendar period under consideration. This period and dimension Fpl depend on the desired units of measurement Ti (weeks, months): day/week, day/month;

KVN is the coefficient of fulfillment of norms. If there is no other data, then it can be taken equal to 1.

If Fpl is specified in calendar days for a period, then it becomes necessary to convert working days into calendar days and the duration of work will be calculated using the formula:

Тi = τi × kр–к / Ri × Fpl × Kvn, where

kр–к — coefficient of conversion of working days into calendar days. It can be calculated as the ratio of the number of calendar (Dк) and working (Dр) days in a year: kр–к=Dк / Dр. Based on the average annual number of working days, weekends and holidays per year, kр–к can be taken equal to 1.45.

If the duration of work must be calculated in calendar days, then:

Тi = τi × kр–к / Ri × Kvn.

The actual duration of work most often turns out to be longer than the calculated one, since expectations, downtime, and the need to make adjustments inevitably arise. The inverse problem can be considered: when performing work with target completion dates, determine the required number of performers to complete the work on time.

It should be noted that in practice, an increase in the number of performers does not always lead to a proportional reduction in work time. In these cases, it seems more appropriate to estimate the duration of the work, considering the possibilities of attracting different numbers of performers.

Expert assessments of R&D time parameters

The organization of expert assessments necessary to determine the duration of work and the processing of their results may be different. When selecting candidates for a group of experts, the requirements are primarily for competence in the field under consideration and related fields. It is quite difficult to determine the optimal size of a group of experts; usually it is a group of 7-15 people. The survey can be organized with a meeting of experts - in the form of a discussion, round table, brainstorming method, etc.; or without - in the form of a questionnaire, the Delphi method, etc. A group assessment can be considered sufficiently reliable only if there is good agreement between the opinions of the experts surveyed.

As a result of the survey, it is necessary to determine the number of performers of each work and the complexity or duration of each work. The number of performers of work (i) of each category (scientists, engineers, laboratory assistants, etc.) is determined based on the number of employees allocated for R&D, taking into account their possible simultaneous participation in other work.

When predicting labor intensity values ​​(or duration of work) based on a survey of experts, the simplest and most commonly used methods for processing survey results are calculating the arithmetic mean and determining the median.

The arithmetic mean is calculated using the formula:

where τi is the assessment of the complexity of the i-th work by the j-th expert, m is the number of experts.

To determine the median, the ratings are ordered, for example, in descending order; the median is taken to be the middle member of the series, in relation to which the number of ratings from the beginning and from the end of the series will be the same. For example, ratings are 4, 8, 4, 7, 5, 9, 6; ordered - 9, 8, 7, 6, 5, 4, 4; median - 6.

The results of the expert assessment and calculations should be summarized in a table reflecting the name of the stage and type of work; type (designer, technologist, laboratory assistant, etc.) and number of performers; duration and, if necessary, labor intensity of the work. An example of the results presentation is table. 1.

Results of expert assessment and calculations of the duration of R&D work (Table 1)

Building a R&D schedule

Based on the calculated duration of stages and work, a R&D schedule is constructed (tape, network or using mixed methods). It is being optimized. Minimization of the duration of R&D or the costs of its implementation, uniform workload of performers, etc. can be taken as an optimization criterion. Optimization methods can be used to parallelize work, change the execution time (without changing the duration), fragmenting work and spreading components over time, changing the speed of work due to resource saturation, etc.

Calculation of the cost of R&D

The cost of scientific and technical products (STP), which is the result of R&D, is determined according to the following costing items; based on this list, a planned estimate is drawn up:

1. Costs of materials, purchased products and semi-finished products for the manufacture of mock-ups and prototypes, including the costs of their acquisition and delivery.

This category should primarily include direct material costs based on R&D data.

The cost of auxiliary materials, most of which can be classified as indirect R&D, are included in this article only if their consumption is directly related to the implementation of this topic; otherwise, the costs of auxiliary materials are charged to the item “Overhead”. Material costs exclude the cost of return waste.

It is advisable to calculate the costs of materials in a table reflecting the R&D stage at which the material resource is consumed, the name of the material, unit of measurement, unit price, quantity, total cost. Example of design - table. 2.

Costs of basic material resources for R&D (Table 2)

The amount of costs for materials, purchased products and semi-finished products increases by the amount of transportation and procurement costs. If there is no data, you can take it equal to 3-5% of the total cost of materials, purchased products and semi-finished products.

2. Costs of work performed by third parties, which are taken into account in contract prices in accordance with counterparty (co-executor) agreements.

These include expenses for components and assemblies received from other enterprises, payment for mock-ups and samples of products made at another enterprise, payment for pilot production or pilot plant work allocated to an independent balance sheet, etc. If the number of contractor works is large, then it is convenient to keep records of this type of cost in tabular form, reflecting: the R&D stage, the name of the work, the co-executing enterprise, the volume of work, the deadline, the costs.

3. Special equipment for scientific (experimental) work, including costs for the acquisition and manufacture of stands, testing stations, instruments, installations, etc., as well as serial products intended for use as test and research objects necessary to carry out this R&D.

This expense item includes costs associated with the acquisition and rental of special equipment (special stands, instruments, installations), which is necessary for carrying out scientific (experimental) work only on this topic.

If special equipment is purchased and used only in R&D data, then the costs of equipment (purchase, delivery, installation) are taken into account in the cost of R&D as direct.

If the equipment is used for other topics at a given enterprise or in a given organization, then its cost for each topic (ZobR&D) is determined as a share of rent or depreciation. Distribution by topic is usually carried out in proportion to the time of use of the equipment (TobR&D):

GobR&D = Aob × TobR&D / TobΣ,

Where:

Aob - the amount of rent (depreciation) for the period (month, year),

TobΣ is the total time of equipment use for the period.

4. Costs of special software used in R&D: software has become one of the significant cost items for R&D, so it is advisable to allocate a special item for their calculation. Software purchased by enterprises falls into the category of intangible assets, so their inclusion in the cost of R&D is carried out by analogy with calculations of costs for special equipment.

5. Costs of remuneration of workers directly involved in R&D.

This calculation item includes the basic salary, bonuses for achieved results, incentive and compensation payments, as well as payments under civil contracts related to R&D. The work can be carried out by a budgetary or commercial organization, which may have its own characteristics. When performing work by a budgetary organization, the wages of employees are determined in accordance with the ETKS and EKS reference books, but the rates or salaries are approved by the head of the organization. When calculating wages in a commercial organization, one should focus on the wage system characteristic of the organization in which it is planned to conduct R&D.

6. Deductions for social needs from the amount of labor costs for workers directly involved in R&D. Calculated in accordance with the legislation at the accepted tax rate.

7. Other basic costs. The main costs for R&D may include the costs of preparing scientific and technical information, conducting patent research and examinations, all types of communication services, and business trips for employees involved in this R&D. If a large share of the main costs (more than 5-7%) belongs to the “other” category, then it is possible to provide for the allocation of additional costing items.

8. Overhead costs, including administrative and general expenses, and others that cannot be linked to specific R&D.

Thus, all overhead costs will be included in the cost of R&D as indirect. Indirect overhead costs can be allocated to individual R&D projects in proportion to the volume of work performed at contract prices; It is also possible to distribute indirect costs in proportion to the costs of remunerating workers directly involved in this R&D, as well as in another way that reflects the specifics of this organization.

Scientific organizations may provide for separating from indirect expenses the costs of maintaining and operating research equipment and facilities, if it is possible to distribute these costs between individual R&D projects in proportion to the loading time of the equipment.

An analysis of the structure of basic costs can show that typical costing items are either very large (more than 40%) or, on the contrary, very small (less than 3%). For example, for many organizations the costs of communications (Internet, telephone conversations, fax, video conferencing, etc.), information (collection and processing of patent information, conducting expert surveys, purchasing patents, licenses, etc.) are becoming increasingly significant. .), certification (obtaining patents, licenses, certificates).

Very large or small items make it difficult to control and analyze costs, so the task may be to change the nomenclature of items with the division or consolidation of typical elements.

As a result of cost planning, it is possible to determine the approximate cost of these works, construct a graph of increasing costs in the coordinates “time (R&D stages) - cumulative costs3” and a graph or diagram (histogram) characterizing the cost structure taking into account possible implementation options. You can present the cost structure both in terms of costing items and in terms of implementation stages. An important stage in the analysis of R&D is the assessment of the effectiveness of this work, both at the planning stage and at the implementation stages. “EZh” will tell you about this stage in the upcoming issues.

1 Due to the high dynamics of R&D automation, standards quickly become outdated, the use of outdated standards is impractical, and constant updating requires significant costs.

2 In the absence of labor intensity standards, it is determined by experts.

3 Cumulative costs - costs calculated on an accrual basis

https://youtu.be/caSeKHBO_1A

Factors in the creation and implementation of scientific developments

The amount of investment in R&D is determined by the chosen strategy of the enterprise in scientific development, as well as the scale of research activities. The efficiency of work is influenced by the process of carrying out and implementing modern developments.

There are five main factors that determine what the outcome of the entire process will be:

1. Expenses for R&D, as well as the distribution of expenses over time.
2. R&D strategy is a long-term program of specific actions, which determines the duration of work from theoretical research to the final result.
3. The volume of the information base and its distribution throughout the entire investment period.
4. Dynamics (rise and decline of investment in a scientific project) and results of the implementation of scientific developments at certain stages.
5. Building connections between participants in a scientific project, the so-called organizational and economic mechanism. Particular attention is paid to the system of relationships between the enterprise-customer of R&D and implementing centers.

Types of research work

To simplify the process of assessing the effectiveness and validity of the use of R&D, research work is divided into several main groups depending on the final result. According to most experts, the main criterion for separation is the effect that is achieved through research and experiments.

Also, one of the aspects of the formation of a particular group may be the number of products, type of enterprise, service sector and other factors.

Four main groups of R&D and their features:

1. Group “A1”, the distinctive feature of which is the commercial orientation of its activities. This may include scientific developments within the framework of equipment improvement, as well as R&D management.
2. Group “A2” is scientific research that is aimed at eliminating current problems in various areas of the company’s activities. This also includes solving management problems, planning and implementing developments in the work of the enterprise, drawing up documentation and technical processes.
3. Group "A3" includes scientific developments to improve and implement existing financial mechanisms, control over the conduct of individual transactions on the stock market. Most often, scientific developments in this category are used to create debt restructuring programs for a company or its subsidiaries.
4. Group “A4” is a research activity aimed at obtaining an applied effect, that is, the result can only be determined by directly using the developments. The scientific research of this group is used to expand the base of applied research in the field of modern technology, science and engineering.

As part of research work, certain patterns and connections are formed between various phenomena, which in turn leads to the creation of more and more new technical ideas.

It is also worth noting that R&D of the A4 group does not have an economic justification, that is, developments are not evaluated for financial benefits, but only establish the direction of research.

Research functions

The innovation process in the modern world is based on scientific developments, which, as a rule, have a commercial effect. Thus, investing in technology and research projects leads to the creation of new products, technological processes and modernized services. In industry, R&D is a factor in the formation of new specific advantages, as well as the main element of innovation.

It turns out that the main function of R&D is the practical application of the resulting phenomena and processes (this is especially typical for applied research). The purpose of research work is to ensure the production of new goods or services to make a profit.

R&D is the pre-production life cycle of a product, a set of ideas and scientific developments for the subsequent sale of products on the market.

At the R&D stages, other functions of research work can be distinguished. So, at the beginning the process is aimed at creating competitive products. For this purpose, marketing campaigns are carried out, the product range is assessed, which is based on new technological solutions. Next, the scale of distribution of the product is established, after which a complex of development work is carried out (experimental products, the result of which is a technological project).

Scientific and technical products include the results of completed R&D, including:

• Research, design and design work, as well as any stages of these works;
• Prototypes and pilot batches of new equipment and materials, manufactured based on the results of research and development work;
• High-tech products produced in small batches;
• Electronic computer software;
• Scientific and production services using unique scientific equipment,
• Information technology services, services in the fields of metrology, certification and information technology;
• Consulting services and expertise of scientific, technical, economic, managerial nature;
• Intellectual property;
• Other types of work and services not prohibited by the legislation of the Russian Federation.

Statistical data

Total scientific output by country.[8][9].

Share in R&D expenses in 2013, % of global

According to the Battelle Memorial Institute, a research institute[10], in 2011, global R&D spending will increase by 3.6% to $1.2 trillion.

The United States ranks first in terms of R&D volume (385.6 billion; 2.7% of its own GDP)

Second place goes to China (153.7 billion; 1.4% of GDP)

Third place belongs to Japan (144.1 billion; 3.3% of GDP)

Russia closes the top ten world leaders (23.1 billion; 1% of GDP)

For reference:

In the USSR, the volume of domestic expenditures on R&D was 5% of GDP[11].

Structure of financing for all types of R&D in 1985

[12]

Sources of R&D funding in the USA

[13]

Structure of private investment in R&D in the United States

[13]

Main objectives of R&D

Precise definition of the tasks of carrying out and implementing scientific developments can significantly increase the efficiency of the process and at the same time avoid possible errors even at the first stage of product creation. The following research tasks can be distinguished:

1. Expanding the information base in the field of modern technologies, science and technology, as well as obtaining new knowledge and skills in the study of society and nature for the purpose of their subsequent application.
2. Determining the competitiveness of a new product (product prototype) and the possibility of its materialization in a specific area of ​​production based on theoretical research and experimental activities.
3. Innovation process and practical implementation of acquired knowledge and skills.

https://youtu.be/fJ52fu7YX8Y

Analysts note that R&D makes it possible to increase the efficiency of resource use, increase the competitiveness of private and public enterprises and improve the standard of living of the population.

The role of R&D in modern business

The role of R&D is growing as the bulk of added value in business shifts from the production stage to the development stage. Based on the results of R&D, key decisions are made in high-tech business. Research and development (R&D) for marketing is becoming increasingly important; companies monitor the latest developments of competitors and consumer needs in order to align their own research with them. The increased role of R&D in business processes is reflected in the newly created position in most large Russian companies - R&D director or manager. The functions of the R&D manager include the formation and implementation of the R&D program, the development of a program for innovative development of the enterprise, the organization of technological processes: technology development, design. At the same time, R&D is one of the most difficult areas from a management point of view, because A distinctive feature of most research is the difficult predictability of the final research results and their possible commercialization. As a result, large R&D expenditures do not always guarantee greater profits or greater market share.

R&D stages and their characteristics

As already mentioned, scientific development is a long process consisting of several stages. The following stages of R&D are distinguished:

• Formation of a fundamental base based on theoretical and exploratory research (less often experiments);
• Applied scientific research;
• Activities of a project nature, the purpose of which is to create a new scientific and technical product (experimental design work);
• Experienced or experimental (can also be performed at previous stages).

It is worth noting that the last stage involves checking the results obtained in order to manufacture and test a standard sample of the product. Carrying out this stage of R&D allows you to test the modified technological process in reality, as well as assess the readiness of equipment, instruments, and installations for the subsequent production of goods.

Description of the main stages of R&D

The fundamental basis is formed through theoretical and exploratory research.

The research stage represents the substantiation of new processes and phenomena, as well as the formation of new theories. Exploratory research is aimed at developing new principles for the production of goods and services (this also includes the use of management). This type of work is characterized by a precise definition of the goal and focus on specific theoretical foundations.

As for applied research, its main task is the practical application of scientific developments. With their help, technical problems are solved, mechanisms for resolving theoretical issues are established, and the first results are achieved, which can subsequently be used to create standard product samples.

The final stage is considered OCD.

This is a transition from experimental to industrial production of a product. Here the production of completely new goods, materials or devices, technical processes or improvement of equipment is carried out.

https://youtu.be/IGsYibrkRn8

Types of R&D

In accordance with regulatory regulation[2], according to the method of accounting for costs, R&D is divided into:

Commodity R&D

(current, custom) - work related to the normal activity of the organization, the results of which are intended for sale to the customer.

Capital R&D

(initiative, for one’s own needs) - work, the costs of which are investments in long-term assets of the organization, the results of which are used in one’s own production and/or are provided for use by others.