Research On The Relevance And Reliability Of Accounting Information Under The Capitalization Of R&D Expenditure

Since January 1,2007,new accounting standards have been introduced in China,which stipulates the conditional capitalization of R&D expenditure.In order to investigate the influences of this policy change which is R&D capitalization on the quality of accounting information and capital market reaction,using listed companies which report R&D expenditure accounting data after the change of criterion as the research object,this paper explores the relationship between the R&D capitalization and relevance and reliability of accounting information by methods of theoretical analysis and empirical research.This research expands the theoretical research of China's accounting development and reform,and provides a train of thought for the listed companies to achieve the goal of maximizing the value of enterprises.It also provides a theoretical basis for the makers of standards to improve the quality of accounting information.Based on the review of previous literature and theoretical analysis,this paper takes 2007-2015 years of Shanghai and Shenzhen A shares listed companies as the research object to study the relevance and reliability of accounting information under the capitalization of R&D expenditure.First of all,this paper uses stock price model to analyze the impact of R&D expenditure capitalization on relevance.It is found that R&D capitalization can significantly improve the value relevance of accounting information.Secondly,the R&D expenditure is divided into capital R&D expenditure and expensed R&D expenditure.Through research,we find that the value relevance of capitalized R&D expenditure is significantly higher than that of expense R&D expenditure.Then,this paper further discusses the impact of different industries.The samples are divided into high-tech enterprises and non-high-tech enterprises.By being studied separately,it is found that capital R&D expenditures in high-tech enterprises have higher value relevance.At the same time,we also consider the impact of capitalization of R&D expenditure on reliability,found that enterprises will affect the reporting of capital R&D expenditure because of all kinds of earnings management motivations,which are as follows:for losses turning motivation and profit smoothing motivation,enterprises will report more capital R&D expenditure;for tax motivation,enterprises will report fewer capital R&D expenditure.Based on the above research,this paper puts forward the corresponding policy recommendations.First,the capital market will react positively to the R&D expenditure of the enterprise,especially the capital R&D expenditure.Therefore,enterprises can do more research and development activities without having to worry too much about the decline of stock prices due to initial investment,especially when R&D activities enter the development stage and conform to capitalization conditions.Second,the capital market pays more attention to the R&D expenditure information disclosed by high-tech enterprise,especially the capital expenditure of R&D,which has significant positive correlation with the stock price,so high-tech enterprises should pay more attention to research and development activities,disclose the R&D expenditure information to the market timely,especially the R&D expenditure which is in the stage of development and meets the conditions of R&D spending capitalization.Third,the accounting standards makers should be aware that the discretion of the management of capital expenditure under the criterion of R&D space still exists,so the conditions that whether in compliance with the report of capital R&D expenditure should be further clear and the disclosure requirements need to be more specific.By this way,try to narrow the scope of management earnings management and reduce the possibility of manager's subjective manipulation.The main innovation of this paper is that,although there are many researches on the relationship between R&D expenditure and enterprise performance and value under the criterion of capitalization of R&D expenditures,but literature which is studying the response of the market to capital and expensed R&D expenditure based on the domestic listed companies is rarely,and there is fewer scholars considering the relevance of the value of R&D expenditure while considering the reliability.Therefore,to some extent,this paper enriches the research of accounting information quality under the rule of R&D expenditure capitalization,and it also provides some inspiration for investors and stakeholders to evaluate corporate value and for policy makers to modify and improve accounting standards.