Study On Motivation Of R&D Expenditure Accounting Policy Choice Of Listed Company

Since 2007,"Accounting Standards for Business Enterprises" for the first time allows enterprises to capitalize eligible R&D expenditures,with the aim of improving the profitability indicators to a certain extent and boosting the enthusiasm of enterprises in R&D investment.Compared with the total expensing approach of the old accounting standards,the conditional capitalization of R&D expenditures is more in line with the real economic reality to a certain extent,but it also enhances the subjectivity in the implementation of the operation and requires management to have a superior professional judgment,and some business management may also be subject to certain motivations to R&D expenditure accounting policy choices.Through the study of China's accounting policies and market environment,this paper selected three aspects--�big bath',retaining the shell resource,and profit smoothing--to study whether it affects the choice of enterprise's R&D expenditure accounting policies;That is to say,whether the company will undertake the R&D expenditure accounting policy choices in the face of lossless hopelessness,the critical point of turning losses and the high surplus.This paper selects A-share data of listed companies in China from 2009 to 2017 as a sample.After excluding the financial industry,data missing samples and extreme values,a total of 1746 observations are taken as samples.Empirical research confirms that the choice of accounting policies for R&D expenditures of listed companies in China is indeed influenced by the motives of �big bath�,motives of capital market shell resources protection,and motives of profit smoothing.And the robustness test confirmed the credibility of the model regression.The possible contribution of this paper lies in the following aspects: Firstly,the particularity of R&D activities is demonstrated through theoretical analysis.Based on the theory of accounting uncertainty and the theory of accounting policy selection,from the definition of assets and expenses,the principle of cost-benefit matching,prudence principle,from the point of view of contradictory with the way of outsourcing purchased intangible assets,the uncertainty of R&D activities and intangible assets,the principle of determining the value of assets based on individual transactions,the subjectivity and the perspective of regulatory dilemma,etc.,we discuss the unreasonable of R&D expenditure accounting treatment.Second,through the analysis of the different impact of expenses and capitalization of R&D expenditures,three motivational factors are proposed and the empirical test is conducted with the designed model.This article also has some limitations.First,this article only studied that in three scenarios--negative accounting earnings,critical turnover point,and high accounting earnings--the company would conduct R&D expenditure accounting policy choices.After setting some control variables,although the empirical test results are quite ideal and consistent with expectations,but whether there are other motivation factors and how other motivation factors impact that are not considered.These have yet to be further studied.Second,although this paper confirms that these motivation factors do affect R&D expenditure accounting policy choices,how the extent of such impact is and if this kind of influence may have a correlation effect with other aspects such as corporate performance,investment and financing performance,etc.,these have yet to be further studied.Thirdly,in the theoretical analysis part of this paper,we discussed the pros and cons of the current three accounting methods for R&D expenditures in depth,and it concludes that the current three treatment methods cannot fully interpret the characteristics of corporation internal R&D activities.And there are also many drawbacks to the conditional R&D expenditures capitalization,what's more,the empirical results also confirm that such conditional capitalization also brings about problems in earnings management.Therefore,whether it is possible to explore a new better method to confirm and measure the corporation internal R&D activities still needs further study.