The Influences Of Earnings Management Of R&D Capitalization On The Enterprise Value

R&D activities are very important to enterprises in that they play a key role in keeping core advantages,seeking for survival and development;especially for those GEM(Growth Enterprise Market)listed companies.So GEM(Growth Enterprise Market)listed companies have strong motivation for earnings management.GEM(Growth Enterprise Market)listed companies have been listed since 2009,so the data sample of this paper is from 2013 to 2015.Meanwhile,the new accounting standards of China in 2006 allows that conditional capitalization of R&D activities,which provides the space of earnings management,therefore this paper studies on the influences of earnings management of R&D capitalization on the enterprise value are more representative and more realistic.This paper finds key factors which can make a vital impact on the R&D capitalization theoretically.Firstly,the study builds a multiple linear regression model following the logic of computing the real and unreal numbers in Jones model on the basis of regression results.Then,this study investigates the value-relevance of R&D capitalization.Finally,the paper will study the lagging effects.Besides,this paper will use a case to vividly describe A company how to manipulate the profits by using R&D capitalization and the influence of its enterprise value.Generally speaking,this paper will tell us that R&D capitalization is not wise and everyone should be aware of that behavior,including enterprises,the government and the investors.Apart from that,this paper provides some suggestions and advice about how to improve the accounting standards.