发布时间 : 星期日 文章研发费用资本化和盈余管理 英文更新完毕开始阅读
Garen Markarian,Lorenzo Pozza,Annalisa Prencipe ,International Journal of Accounting 2008-3 爱思唯尔期刊
Capitalization of R&D Costs and Earnings Management：Evidence from Italian Listed Companies
ABSTRACT: The capitalization of research and development (R&D) costs is a controversial accounting issue because of the contention that such capitalization is motivated by incentives to manipulate earnings. Based on a sample of Italian listed companies, this study examines whether companies' decisions to capitalize R&D costs are affected by earnings-management motivations. Italy provides a natural context for testing our hypothesized relationships because Italian GAAP allows for the capitalization of R&D costs. Using a Tobit regression model to test our hypotheses, we show that companies tend to use cost capitalization for earnings-smoothing purposes. The hypothesis that firms capitalize R&D costs to reduce the risk of violating debt covenants is not supported. KEY WORDS: Earnings management, Cost capitalization, R&D accounting, Earnings smoothing, Debt covenants, Italian companies
1 Introduction In the current era of globalization, a highly relevant issue facing regulators, academics, and practitio
ners is the determination of an appropriate accounting treatment for research and development (R&D) costs. International Accounting Standards discuss accounting for R&D costs in IAS No. 38 “Intangible Assets” (IASB, 2004; IASB, 2004). Paragraph 54 of this standard states that no intangible asset arising from research (or from the research phase of an internal project) shall be recognized as an asset; and that research expenses shall be expensed in the income statement when they are incurred. Concerning development costs, paragraph 57 states that an intangible asset arising from development (or from the development phase of an internal project) shall be recognized if, and only if, an entity can demonstrate all of the following: (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (b) its intention to complete the intangible asset and use or sell it; (c) its ability to use or sell the intangible asset; (d) how the intangible asset will generate probable future economic benefits; (e) the availability of adequate technical, financial, and other resources to complete the development and to use or sell the intangible asset; (f) its ability to measure reliably the expenditure attributable to the intangible asset during its development. Although IAS 38 allows companies t
o capitalize development costs, the inherent subjectivity of the validation process permits management to exercise discretion in deciding whether the conditions of IAS 38 have been satisfied. In essence, IAS 38 gives management considerable flexibility regarding the treatment of development costs. US GAAP takes a stricter approach to the issue. SFAS No. 2—Accounting for Research and Development Costs (FASB, 1974)—requires that all R&D expenditures be expensed in the current period. The only exception to the full expensing rule is stated in SFAS No. 86. The exception relates to the capitalization of software development costs (FASB, 1985). At the international level, certain national accounting standards (e.g., those of Italy) allow flexibility for the capitalization of R&D costs when some conditions are satisfied. These are conditions similar to those required by IAS.
The capitalization of R&D costs has always been a controversial accounting issue. Supporters of capitalization report results suggesting that R&D is a long-lived asset that influences future profitability (e.g., Bublitz and Ettredge, 1989, January; Sougiannis, 1994, January; Ballester et al., 2003). Also, R&D costs are positively related to market value (Hirsch
ey and Weygandt, 1985, Spring; Shevlin, 1991, January; Sougiannis, 1994, January) and yield value-relevant information to investors (e.g., Aboody and Lev, 1998; Lev and Zarowin, 1999; Healy et al., 2002; Monahan, 2005). Supporters of expensing are fewer. They stress the lack of reliable evidence of future economic benefits (e.g., FASB, 1974; Association for Investment Management and Research, 1993; Kothari et al., 2002) or refer to the benefits of consistency and comparability, pointing out that such benefits trump the costs identified by the supporters of capitalization. Additionally, reliability and the risk of earnings-management policies are underscored by supporters of the most conservative accounting treatment. In particular, expensing is preferable to capitalization because it increases the objectivity of financial statements. That is, it eliminates the opportunity for managers to capitalize costs of projects that have low probabilities of success or to delay impairment of R&D assets ( Nelson et al., 2003; Schilit, 2002). The debate surrounding the most effective accounting method for R&D costs supplements other literature that examines the trade-off between relevance (i.e., the predictive ability) and reliability (i.e., the representative faithfulness) of accounting information (FASB, 1980; AICPA, 1994; IASB, 200