Research The Impact Of Financial Capability On The Truthfulness Of R&D Capitalization

Innovative and R&D are the fundamental driving force for enterprises to achieve sustainable development.Enterprises clearly realize that if they want to continue to achieve sustainable development mode,they must start with R&D investment.Therefore,enterprises gradually begin to pay attention to the importance of R&D activities,and the intensity of R&D investment is constantly strengthened.Nowadays,the proportion of R&D expenditure in total corporate expenditure is increasing.Accordingly,corporate financial reporting and economic activities are directly affected by the recognition and treatment of R&D expenditure.The difference of accounting treatment methods of R&D expenditure will lead to great difference of accounting information disclosed by enterprises,which may distort some accounting information.At the same time,the treatment methods of R&D expenditure may also have an impact on the progress of scientific and technological innovation and the future development of enterprises.In the new edition of accounting standards,conditional capitalization accounting policy has replaced the accounting policy of full expenditure treatment.From the specific conditions of capitalization of R&D expenditure,we can find that these conditions have great subjectivity.R&D activities are spontaneous rather than compulsory.Therefore,little information about this activity is known to the outside world,and it is difficult to obtain it only from the information published by enterprises.In order to effectively supervise the R&D activities of enterprises,which leads to the asymmetry of information inside and outside enterprises,and provides enterprises with earnings management opportunities.In addition,R&D expenditure and its capitalization have become one of the important means of earnings management.Then,under what circumstances will lead to such earnings management behavior,making R&D expenditure capitalized distortion,is the focus of this paper.This paper uses empirical method to study the causes of R&D expenditure capitalization distortion.The results show that inadequate financial capacity is one of the causes of R&D expenditure capitalization distortion.This papertakes listed companies with R&D activities in A-shares listed in Shanghai and Shenzhen Stock Exchanges from 2008 to 2015 as research samples,and uses earnings management behavior of enterprises using R&D expenditure capitalization to express the degree of truth of R&D expenditure capitalization.Therefore,this paper calculates the degree of accrued earnings management through the extended Jones model,and then uses the results as explanatory variables to study finance.The results show that when the financial situation of enterprises is weak,enterprises will manage their earnings by increasing the degree of R&D expenditure capitalization,which leads to the distortion of R&D expenditure capitalization,that is,the lack of financial capacity is one of the reasons for the distortion of R&D expenditure capitalization.Secondly,the nature of property rights and macroeconomic prosperity are taken as adjusting variables to study the regulatory effect of these two situations on the above results.The results show that compared with state-owned enterprises,private enterprises are more likely to manage earnings by capitalizing R&D expenditure when their financial capacity is insufficient,which leads to the distortion of R&D expenditure capitalization.At the same time,in the economic depression,when the financial capacity of enterprises is weak,in order to obtain financing or meet the conditions of listing,the phenomenon of earnings management by this way is more significant.Therefore,the conclusion of this paper is helpful to find the way to curb the capitalization fraud of R&D expenditure,to provide the necessary empirical evidence for effectively preventing the capitalization fraud of R&D expenditure,and to supervise the earnings management of enterprises with R&D activities effectively by government departments,so that enterprises can improve their own business activities under the supervision of the government and provide some information for their operation.The reference value of various degrees makes the quality of accounting information disclosed by enterprises higher.