Capitalization Of R&D Expenditure And The Enterprise Value Relevance Research

With constant advance of the society, the economic develop constantly. Domesticmarket competition has been substituted by international competition. The newindustry enterprises are rising rapidly, such as electrons, medicine, etc. And traditionalmanufacturing enterprises’ industrial structures need upgrading. At this kind ofbackground, more and more enterprises have paid their attention on the development.Increasing fund of R&D (research and development), improve efficiency of R&D,enhanced enterprise competitiveness have been the primary task of the enterprises inour country to promote the updating of enterprises’ industrial structure.In2007, the new accounting standards smooth implement. The relationshipbetween R&D capitalization strength and enterprise performance and value has beenattracted the domestic and foreign scholars’ attention. The user of enterpriseinformation can get more accurate, comprehensive, detail and truth date by the R&Dprocessing method of expenditure capitalized. The user can real-time receive theprogress situation and the success of R&D. It makes the user became full ofconfidence for the enterprise, and actively promote the increase of corporationmanagement performanceIn this paper, it analyzed R&D accounting method from different nations. Basedon this background, it introduced the R&D accounting method historical evolution ofour country, and analyzed the relationship between the strength of R&D capitalizationexpenditure and enterprise value from theoretical angle. The paper established thelinear regression model based on the theoretical analysis and chose more than athousand enterprises, from Shanghai and Shenzhen stock, as samples. Using thismodel, it analyzed the relationship between the strength of R&D capitalizationexpenditure and enterprise value from the empirical analysis angle. The results showthat the relationship between the strength of R&D capitalization expenditure andenterprise value is positive correlation. Increasing R&D investment will helpenhance corporate value; strength of capitalized R&D expenditures and enterprisevalue fluctuations has significantly positive correlation. Capitalized R&D expenditures has the positive role of enterprise value, further R&D expendituresreaching the development stage is better able to promote the enhancement of thecorporate value. At the same time, out coming the R&D expenditure to promote R&D expenditure from the research stage to the development stage, which enhancesthe enterprise market status, and improves the enterprise’s core competitive force, sothat enterprises can get funds for sustainable development, so as to obtain greateropportunities for growth and wider profit margins. Promoting R&D outcome canhelp to enhance the core competitiveness of enterprises, which makes enterprise havean invincible position in the fierce market competition.