Research And Development Of The Accounting Problems

It is well known that R&D has a positive effect on the growth of the world economy. It becomes extremely obvious in the new century. With such enormous R&D costs, how to regulate it is on the agenda in order to reflect the real financial position of companies. At present, accounting field intensely argues about the regulation of accounting for R&D. It focuses on expensing, capitalizing or capitalizing if certain conditions are met.Firstly, this paper discusses briefly the basic concepts of R&D. And the author divides activities of R&D into firm's independent activities of R&D and R&D arrangements according to different entities of R&D. Furthermore, the author puts forward the significance of this study. Secondly, the author analyzes our national firms' current R&D situation based on the analysis of accounting environments for R&D. And it discusses the relation between market system and government policy and firm's R&D from the macro perspective. Then the article argues about the question of accounting for R&D from firm's independent activities of R&D and R&D arrangements. It is also the focus of this paper. As for the accounting for R&D of firm's independent activities of R&D, it analyzes the constituents of R&D costs. And it discusses the accounting treatment for R&D costs from international , technical and theoretical perspective. Then, the author puts forward that firm's R&D expenditure should be capitalized after certain conditions are met, which refers to after passing the technical feasibility test. As for the accounting for R&D arrangements, the author thinks that the principle of substance over form should be used to account for it. And an analysis of the contract clauses should be made carefully, such as who is really responsible for the arrangements. An entity should determine the nature of the obligation it incurs when it enters into an arrangement with other parties who funds its R&D. Different accounting methods for R&D should be used under different conditions.