Research On The Economic Consequences Of Reporting R&D Expenses Separately

Since entering the 21st century,innovation has become an important way for enterprises to maintain their market competitiveness.Innovation,as an important valueadded activity of an enterprise,can bring excess profits to the enterprise,gain a monopoly position and increase the market value of the enterprise.According to statistics,China’s R&D expenditure in 2019 exceeded 2 trillion yuan,of which enterprises were the backbone of R&D expenditures.Prior to 2018,information on corporate R&D expenses is usually disclosed in the notes to the annual report,but there are irregularities such as non-disclosure or incomplete disclosure.In an asymmetric information environment,annual reports are the main channel for investors and other external stakeholders to obtain R&D expense information.Therefore,the transparency of the R&D expense information disclosed in the annual report will largely affect the decision-making behavior of external stakeholders.In order to standardize the reporting of corporate financial statements and improve the quality of accounting information,the Ministry of Finance requires non-financial companies that implement corporate accounting standards to separately list the detailed account of "Management Expenses""Research and Development Expenses" in the income statement.With the help of this exogenous policy,this article attempts to study the impact of the economic consequences of separately reporting R&D expenses on analysts’forecast behavior and the true economic effects,and tries to make relevant policy recommendations.The research object of this article is A-share listed companies from 2016 to 2019,and the relevant research data comes from the CSMAR database.This paper builds a DID model based on the time difference between listed companies disclosing R&D expense information.Through regression analysis,this paper draws the following conclusion:after R&D expenses are presented separately,analysts predict divergence of company performance in the next year will be significantly reduced,and the value of the enterprises are significantly improved.Further analysis found that:after R&D expenses are presented separately,the level of R&D investments are increased significantly;the reduction in analysts predict divergence is mainly reflected in companies audited by the "Big Four Accounting Firm"and non-high-tech companies;the increase in corporate value is mainly reflected in companies with a good financial performance and high-tech companies.The research contributions of this article are as follows:First,the study of this article aims to explore the economic consequences of the reform of the R&D expense information disclosure system and enrich the existing domestic relevant research results;Secondly,the research conclusion of this paper shows that the improvement of information disclosure system can provide useful information for decision-making for external stakeholders,and further improvement of our country’s capital market information disclosure system is imperative.