R&D Expenditure Capitalized And Analyst Earnings Forecast’s Empirical Research

With the rapid development of technology economy, R&D enterprise level is both importantfactors in determining the development of space and core competitiveness of enterprises, but alsofully embodies an industry or even a comprehensive strength and the country’s economicdevelopment potential. As businesses increasingly starting to focus on new product research anddevelopment, production and operation of the proportion of R&D costs is also growing, intangibleresearch and development activities has become the lifeblood of enterprise competition anddevelopment. Meanwhile, the accounting treatment of business R&D expenditure is reasonable,directly related to the quality of financial reporting information, it is essential to reflect thecompany’s real earnings levels.This article learn from domestic and foreign scholars on R&D expenditure and securitiesanalysts forecast earnings effect of the research results, through theoretical analysis and empiricaltest method of combining, taking into account the different degree of earnings management,corporate research between these earnings management the correlation of the presence. Thus weselected all IT companies in China in accordance with the Commission data2011-2012IndustryCode classification obtained for the study sample, first of all2011-2012IT Listed Companies R&Dinvestment in the case of descriptive statistical analysis, then choose can affect securities analystearnings forecast effects related explanatory variables, control variables and the dependent variablecorrelation test, then all the relevant variables in the regression analysis based on the design of theregression model, the validation study hypothesis, combined with comparative analysis,comprehensive draw a sample of companies at different earnings management, R&D expendituresand the impact of the mechanism of conditional capital securities analyst earnings forecast report,and finally we draw these conclusions:(1) If the corporate with a lower level of earningsmanagement, R&D expenditure capitalized behavior can significantly improve the accuracy ofanalyst earnings forecast, reducing forecast differences; and when there is a higher degree ofearnings management, this behavior would not be significant influence analyst earnings forecastresults.(2) If the corporate with a lower level of earnings management, R&D expenses for thehigher degree being with accuracy of analyst earnings forecast is lower, the higher the divergence;The R&D expenditure, the higher the degree of capitalization, higher analyst earnings forecastaccuracy, the smaller the divergence. If there is a higher degree of corporate earnings management,R&D expenses, capital does not significantly affect the degree of analyst earnings forecast results.According to the research results obtained in this paper, the author also put forward some suggestions and inspiration to enrich our research results in this field. However, given the limitedlevel I study, this paper there are still many limitations, future research may improve some of theexisting lack of points, such as the expansion of the sample size, sub-sector interpretation, improvethe research design models, having regard research point of view to investors and other marketreaction as the next major research directions.