研发费用资本化和盈余管理英文.docx

研发费用资本化和盈余管理英文.docx

《研发费用资本化和盈余管理英文.docx》由会员分享，可在线阅读，更多相关《研发费用资本化和盈余管理英文.docx（6页珍藏版）》请在冰豆网上搜索。

研发费用资本化和盈余管理英文

GarenMarkarian,LorenzoPozza,AnnalisaPrencipe ,InternationalJournalofAccounting 2008-3 爱思唯尔期刊

CapitalizationofR&DCostsandEarningsManagement：

EvidencefromItalianListedCompanies

ABSTRACT:

Thecapitalizationofresearchanddevelopment（R&D）costsisacontroversialaccountingissuebecauseofthecontentionthatsuchcapitalizationismotivatedbyincentivestomanipulateearnings.BasedonasampleofItalianlistedcompanies,thisstudyexamineswhethercompanies'decisionstocapitalizeR&Dcostsareaffectedbyearnings-managementmotivations.ItalyprovidesanaturalcontextfortestingourhypothesizedrelationshipsbecauseItalianGAAPallowsforthecapitalizationofR&Dcosts.UsingaTobitregressionmodeltotestourhypotheses,weshowthatcompaniestendtousecostcapitalizationforearnings-smoothingpurposes.ThehypothesisthatfirmscapitalizeR&Dcoststoreducetheriskofviolatingdebtcovenantsisnotsupported.KEYWORDS:

Earningsmanagement,Costcapitalization,R&Daccounting,Earningssmoothing,Debtcovenants,Italiancompanies

1IntroductionInthecurrenteraofglobalization,ahighlyrelevantissuefacingregulators,academics,andpractitionersisthedeterminationofanappropriateaccountingtreatmentforresearchanddevelopment（R&D）costs.InternationalAccountingStandardsdiscussaccountingforR&DcostsinIASNo.38“IntangibleAssets”（IASB,2004;IASB,2004）.Paragraph54ofthisstandardstatesthatnointangibleassetarisingfromresearch（orfromtheresearchphaseofaninternalproject）shallberecognizedasanasset;andthatresearchexpensesshallbeexpensedintheincomestatementwhentheyareincurred.Concerningdevelopmentcosts,paragraph57statesthatanintangibleassetarisingfromdevelopment（orfromthedevelopmentphaseofaninternalproject）shallberecognizedif,andonlyif,anentitycandemonstrateallofthefollowing:

（a）thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale;（b）itsintentiontocompletetheintangibleassetanduseorsellit;（c）itsabilitytouseorselltheintangibleasset;（d）howtheintangibleassetwillgenerateprobablefutureeconomicbenefits;（e）theavailabilityofadequatetechnical,financial,andotherresourcestocompletethedevelopmentandtouseorselltheintangibleasset;（f）itsabilitytomeasurereliablytheexpenditureattributabletotheintangibleassetduringitsdevelopment.AlthoughIAS38allowscompaniestocapitalizedevelopmentcosts,theinherentsubjectivityofthevalidationprocesspermitsmanagementtoexercisediscretionindecidingwhethertheconditionsofIAS38havebeensatisfied.Inessence,IAS38givesmanagementconsiderableflexibilityregardingthetreatmentofdevelopmentcosts.

USGAAPtakesastricterapproachtotheissue.SFASNo.2—AccountingforResearchandDevelopmentCosts（FASB,1974）—requiresthatallR&Dexpendituresbeexpensedinthecurrentperiod.TheonlyexceptiontothefullexpensingruleisstatedinSFASNo.86.Theexceptionrelatestothecapitalizationofsoftwaredevelopmentcosts（FASB,1985）.Attheinternationallevel,certainnationalaccountingstandards（e.g.,thoseofItaly）allowflexibilityforthecapitalizationofR&Dcostswhensomeconditionsaresatisfied.TheseareconditionssimilartothoserequiredbyIAS.

ThecapitalizationofR&Dcostshasalwaysbeenacontroversialaccountingissue.SupportersofcapitalizationreportresultssuggestingthatR&Disalong-livedassetthatinfluencesfutureprofitability（e.g.,BublitzandEttredge,1989,January;Sougiannis,1994,January;Ballesteretal.,2003）.Also,R&Dcostsarepositivelyrelatedtomarketvalue（HirscheyandWeygandt,1985,Spring;Shevlin,1991,January;Sougiannis,1994,January）andyieldvalue-relevantinformationtoinvestors（e.g.,AboodyandLev,1998;LevandZarowin,1999;Healyetal.,2002;Monahan,2005）.Supportersofexpensingarefewer.Theystressthelackofreliableevidenceoffutureeconomicbenefits（e.g.,FASB,1974;AssociationforInvestmentManagementandResearch,1993;Kotharietal.,2002）orrefertothebenefitsofconsistencyandcomparability,pointingoutthatsuchbenefitstrumpthecostsidentifiedbythesupportersofcapitalization.Additionally,reliabilityandtheriskofearnings-managementpoliciesareunderscoredbysupportersofthemostconservativeaccountingtreatment.Inparticular,expensingispreferabletocapitalizationbecauseitincreasestheobjectivityoffinancialstatements.Thatis,iteliminatestheopportunityformanagerstocapitalizecostsofprojectsthathavelowprobabilitiesofsuccessortodelayimpairmentofR&Dassets（Nelsonetal.,2003;Schilit,2002）.ThedebatesurroundingthemosteffectiveaccountingmethodforR&Dcostssupplementsotherliteraturethatexaminesthetrade-offbetweenrelevance（i.e.,thepredictiveability）andreliability（i.e.,therepresentativefaithfulness）ofaccountinginformation（FASB,1980;AICPA,1994;IASB,2004;IASB,2004）.Thusfar,empiricalresearchonR&Dcostshasfocusedmainlyontherelevancesideofthetrade-off,whilelittlehasbeenwrittenaboutthereliabilitysidethatis,thepossibilitythatR&Dcostsaresubjecttoearningsmanagement.

However,afewstudieshaveindeedshownthatR&Dexpendituresaresubjecttorealearningsmanagement.Inshort,thismeansthatcompaniescuttheirR&Dinvestmentsinordertoachievetheirearningsgoals（e.g.,PerryandGrinaker,1994;Bushee,1998;Mandeetal.,2000）.ButthereisstillapaucityofresearchthatexploresthemotivesbehindtheaccountingtreatmentofR&Dcostswithinasettingwhereflexibilityisallowed.TestingwhethercompaniesengageinearningsmanagementthroughR&Dcostaccountingcansignificantlycontributetothedebatearoundthebesttreatmentforsuchcosts.ThisdebatehasrecentlybeenraisedwithintheconvergenceprojectbyUSGAAPandIAS/IFRS.IllustratingthatR&DcostcapitalizationismotivatedbyincentivestomanipulateearningswouldsupportthecurrentU.S.GAAPposition,whichdoesnotallowthecapitalizationofsuchcosts.Onthecontrary,showingthatcompaniesdonotuseR&Dcostaccountingforearnings-managementpurposeswouldsupporttheapproachnowstatedbyIAS/IFRS,inwhichcapitalizationisallowedundercertainconditions.ThisstudycontributestothisdebatebyprovidingempiricalevidenceonthemotivationsforR&Dcostcapitalization.WehypothesizethatthedecisiontocapitalizeR&Dexpendituresisrelatedtotwoprimarymotivations:

incomesmoothinganddebtcontracting.WetestourhypothesesusingasampleoffirmslistedontheMilanStockExchange.MultivariateresultsindicatethatfirmsusecapitalizationofR&Dcoststosmoothearnings,whilethereisnosupportforthedebt-covenanthypothesis.Theseresultsarerobustwithinavarietyoffirmcharacteristics,suchasfirmsize,risk,opportunitiesforgrowth,profitability,governancecharacteristics,industrialmembership,andtimecontrol.Thepaperproceedsasfollows.Section2introducesaccountinginItalyandtheinstitutionalbackgroundrelatingtoR&Daccounting.Section3discussesthepreviousliterature.Section4presentsthehypothesesand

isfollowedbytheresearchmethodsinSection5.Section6presentstheresultsandSection7concludesthestudy.2R&DaccountinginItalyItalianaccountingregulationhasalwaysallowedforsomeflexibilityinthecapitalizationofR&Dcosts.ThisallowanceissimilartothatofIAS.Accountingforintangibles,includingR&Dcosts,isregulatedbyPrincipioContabilen.24（AccountingStandardNo.24）.ThisstandarddistinguishesthreedifferenttypesofR&Dcostsasfollows:

1）“Basicresearch,”whichconsistsofstudies,surveys,andexperimentsthatdonotrefertoaspecificproject;thistypeofR&Dcostisnormallycarriedoutforthegeneralutilityofacompany（e.g.,marketresearch,updating,etc.）;

2）“Appliedresearch,”whichconsistsofstudies,surveys,andexperimentsthatrefertospecificprojects;

3）“Development,”whichconsistsoftheapplicationofresearchresultstospecificmaterials,tools,products,andprocessesprecedingproduction.

Thecostsforbasicresearcharetobeexpensedintheincomestatement.However,costsrelatedtoappliedR&Dcanbecapitalizedifthefollowingconditionsaremet:

a）thecostsrefertoaprojectfortherealizationofaclearlydefinedproductorprocess;b）thecostsareidentifiableandmeasurable;c）theprojecttowhichthecostsreferistechnicallyfeasible;d）thecompanyownsthenecessaryresourcestocompleteandexploittheproject;ande）thecostsarerecoverablethroughtherevenuesgeneratedbyexploitingtheproject.ItisevidentthattheconditionsstatedbytheItalianaccountingstandardsaresimilartothosestatedbyIASfordevelopmentcosts.Infact,thedefinitionofappliedresearchunderItalianstandardsalsofitsintothedefinitionofdevelopmentcostsprovidedbyIAS38.TheItalianstandardsdifferfromIASinthattheydonotrequireR&Dcapitalizationwhentheabovementionedconditionsoccur,leavingflexibilityinthehandsofthecompanies.However,thisdifferenceismoreformalthansubstantive.Giventhesubjectivityinassessingtheoccurrenceofsomeoftheconditions,itseemsthat,evenunderIAS,companiesthatpreferimmediateexpensingcaneasilyjustifythisapproach—evenwhentheaforementionedconditionsaremet.ConcerningtheamortizationofR&Dcosts,theItalianaccountingstandardsrequirethattheamortizationbecarriedoutoveraperiodofnolongerthanfiveyearsbeginningfromthemomenttheoutcome（productorprocess）isreadytobeused.TheItalianCivilCode（art.2426）statesthatthecapitalizatio