The Capitalization Of R&D Expenditures And Earnings Management

With the continuous innovation and development of science and technology,enterprises pay more and more attention to R&D and innovation.In 2016,a total of 1.5676 trillion yuan was invested in research and experimental development(R&D).2007 accounting standard adjusts the research and development expense to the conditional capitalization processing mode,so that the enterprise has enough choice space.However,in the process of implementation,there are deficiencies in the division criteria between the research phase and the development phase,the imperfect disclosure of research and development activities,and the fact that the company's stakeholders and regulatory agencies do not understand the R&D activities of the enterprise.Due to many factors,capitalization of research and development expenditure has become a way of corporate earnings management.This paper mainly adopts the research method of literature retrieval and case analysis.First of all,I sorted out the domestic and foreign literatures and theoretical foundation of R&D expenditure and earnings management.Then I will carry on Software and Information Technology services statistical analysis,Third the representative Yonyou Network is selected for case analysis.Starting from the financial data related to R & D expenditures in the annual reports of the enterprise in recent years,this paper analyzes the accounting treatment of R&D expenditures,evidence of earnings management and motivation analysis.And then reveals how the listed companies in our country can make use of the imperfections in the relevant provisions of R&D expenditure to implement earnings management.Fourthly,combining with the industry statistics and case studies,this paper summarizes the existing problems in China's R&D spending accounting policy and puts forward relevant Suggestions.The research results show that there are indeed many imperfections in the current accounting standards for R&D expenditures.This article draws the following conclusions:(1)In the current research and development expenditure accounting standards,there is no strict demarcation standard for the research phase and development stage,which brings opportunities for enterprises to use the capitalization of R&D expenditure to implement earnings management;(2)Some companies are incomplete in their annual reports on R&D investment.It is therefore propose that that following recommendation:(1)The standard of the research phase and the development stage can be determined by the relevant quantitative indicators;(2)Government agencies should increase their oversight of corporate R&D spending.