Research On R&D Information Disclosure And Value Relevance Of China Listed Companies

Under the fierce competition environment, being the source of technology innovation, R&D activities are crucial to help the enterprises maintain the core competence. The enterprises attaching much importance to R&D activities, along with the rapid increases of R&D input, make the users of accounting information have higher requirements for the disclosure of R&D information. Disclosing R&D information in the financial statements will help users of financial report to know the level of R&D input and technology competence, so as to predict the future profitability and development potential of the enterprise and help investors determine the value of the enterprise.There are a lot of empirical literatures studied the value relevance of R&D information in the west. On the one hand, the empirical results show the value relevance of R&D. On the other hand, the researches find that the severe inadequacy of R&D information results in the decline of usefulness of financial information. The new accounting standard of intangible assets of our country changes the accounting treatment of R&D from expensing to conditional capitalizing. This change of accounting policy will lead to significance effects on the R&D information disclosure and the value relevance of R&D, so it is necessary for us to study the effects in depth. This paper centers on the thinking of "the theory and present situation of R&D information disclosure—the value relevance of R&D information—how to improve the R&D information disclosure to increase the value relevance", studying R&D information disclosure and its value relevance from the following aspects:At first, studying on the disclosure theory of R&D. This will hep us to find the regularity of R&D disclosure and can guide the companies to disclose the R&D information.Second, studying the present situation of R&D information disclosure of our listed companies from two aspects, the first is to compare the R&D disclosure before and after the promulgation of new accounting standards of intangible assets; the second is to focus on the disclosure of R&D expenditure the new accounting standards to know the implementation of the standard.Then, this paper studies the value relevance of R&D from two points of view. The first is to test the value relevance of expensed and capitalized R&D expenditure and how the disclosure quality of R&D information affects the value relevance of accounting information; the second is to investigate if the accounting treatment of conditional capitalized R&D can improve the usefulness of accounting information.At last, using questionnaire method to investigate the R&D information demand of accounting information users and provide suggestions to improve the information disclosure of R&D.The research in this paper draws the following conclusions:Firstly, as to the disclosure theory of R&D information, after analyzing the regulation theory and non-regulation theory of information disclosure, the paper puts forward that the information disclosure is the combination of voluntary disclosure and mandatory disclosure; aiming at the characteristic of R&D information involving the business secret of the enterprise, it points out that the disclosure of R&D information must trade off between cost and benefit and raises the R&D disclosure theory of moderate degree.Secondly, after the comparison of R&D disclosure before and after the implementation of new accounting standards, this paper finds that the R&D information disclosure frequency of 2007 is significant higher than 2006 and R&D information disclosure frequency is positively related to R&D intensity. After the implementation of new intangible accounting standards for three years, the companies that disclose the R&D expenditure increases and the disclosure quality is improved, but there still are some questions.Thirdly, after testing the value relevance of R&D expenditure disclosure, we find that R&D expenditure had positive improvement to stock prices; investors give positive value to capitalized R&D and expensed R&D, but capitalized R&D have higher association than expensed R&D. In addition, the disclosure quality of R&D disclosure also is positively and significantly associated with the stock prices.After empirical test of price models and return models, the paper finds that the conditional capitalization of R&D under the new intangible accounting standard can increase the value relevance of accounting information.Fourthly, according to the present situation of R&D information disclosure and the results of the questionnaire, some suggestions are raised to improve the R&D expenditure disclosure:the first is to improve the implementation system of accounting standards; the second is to further improve the disclosure of R&D accounting policies and R&D expenditures in the note to the financial statements; the third is to disclose R&D activities in the subsection of "management discussion and analysis" in the annual report; the fourth is to separate the R&D expenditure form the administration expense and present it in the face of income statement alone; the fifth is to strengthen the management of R&D information disclosure.