Extraordinary Research and Development

Extraordinary Research and Development is expenditure on new product development that goes beyond a specific amount typical to maintain the range of products or services currently offered. For example, 'extraordinary' expenditure may be required to create an entirely new product range due to the availability of new technology or changes in the law. This expenditure would probably be made only once, until the protocols and working practices needed to maintain the new product range are established amongst the workforce.

In companies and co-operatives, such expenditure would deplete the money available for dividends and could also depress the share price (in companies). For this reason, expenditure over a set amount must be recognised as an additional investment by existing members by issues them 'paid up' shares to the value of the investment. This way, the membership involved in making the investment decision will be compensated if/when that investment generates an additional surplus.

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