The Influence Of R&D Expensing On Accounting Information Usefulness

The evidence from research result of America scholars indicates that the usefulness of accounting information has been deteriorating.lt is partly responsible for the deterioration in usefulness that R&D expensing have increased and immediately been expensed,while the benefits are recorded later,and not matched with the previously expensed R&D investment.Consequentely,the fundermental accounting principle of periodically matching costs and revenue is seriously distorted,affecting the usefulness of accounting information to investors.Then, how about the fact in china?In this study,we select those high-tech public companies which report R&D expensing in annual reports as sample.The result of experiential study suggests that unlike that of America, in china,even if the recent four years witness obvious increase of R&D expensing,the usefulness of accounting information does not deteriorate.That is to say, in china of the present,R&D investment been immediately expensed can not affect the usefulness of accounting information to investors.Why?We believe,now in China,the basic that R&D expensing affects the usefulness of accounting information to investors has not still existed.That is to say,a direct relationship between R&D expensing and specific future revenue generally has not been demonstrated.Additionally,in the process of research,we accumulated some previous data and had some special thought,which also comprises a part of the study.Reading many annual reports of domestic and foreign companies,we found a fact that foreign companies regard reporting of R&D expensing as a way though which the competitive and the innovative power is propagated .They are willing to report the expensing in several aspects.By comparison,Chinese companies tend to avoid it. To improve the transparency ofinformation report, we believe,it is very necessary to enact related rule.Moreover,in annual report of statistics of China,the data about R&D and R&D expensing is also compiled.Analysing the data,we have a view about Chinese R&D, the sources of R&D investment,and how this money is used,and which level our R&D is on.On the one hand,R&D expensing from a variety of sources has been increasing year by year,which reflects the willing and the action of the leadership of companies and our country. On the other hand,there exist a considerable gap between China and those developed country in R&D level .We have a distant and tough way.