Study On Choice Of Accounting Treatment Of R&D Expenditures

In the era of knowledge economy, the percentage of R&D expenditure is increasingly growing, so it is very important to recognize and measure R&D expenditure. In the new accounting standard which issued in 2006, there are also some changes in the treatment of the expenditure of R&D. Based on this, this paper studies on the accounting treatment of R&D expenditure and comes to my own conclusions.First this paper introduces the concept, content, characteristics of R&D expenditure and factors which influence R&D expenditure. It also introduces accounting treatment modes in several countries. Then it carefully analyzes the reasonability and limitations of the accounting treatment modes in the new accounting standard. Based on these limited factors, this paper puts forward the method which is through classifying the R&D expenditure to treat. Divide the enterprise into three categories: software industries, high-technology industries and others which have small R&D expenditure. Take different methods for different categories:1. For software industry whose activities are mainly research and development: Because their R&D expenditure is different from others, so I use the exception principle to treat it, and capitalize all R&D expenditure.2. For the high-technology industries: Due to those enterprises depend very much on research and development activities and the expenditure of R&D is very high, I put forward to take a comprehensive method which do not categorize the expenditure of R&D to the loss and income, nor capitalize it or cost it, but depending on the result to decide taking which method.3. For enterprises which have small expenditures on R&D: According to materiality principle, I classify it to current loss and income, and record it in"research and development"account.This paper studies the accounting treatment of the software industries and the high-technology industries. And it also proves the feasibility of using the sub-category accounting treatment of R&D costs. This method can enhance the operability of accounting treatment for enterprises and better reflect and control expenditure of R&D.