102 research outputs found
The Impact of Task Performance Fraud Risk Assessment on Forensic Skills and Mindsets: A Conceptual Model
Associação entre sistema de incentivos gerenciais e práticas de contabilidade gerencial
The Production Balancing and the Association between Overproduction and Future Financial Performance
A League of Their Own? Financial Analysts' Responses to Restatements and Corrective Disclosures
Interpretations of Probability Expressions: A Comparison Between Standard‐Setters and Accountants
Capitalization of R&D and the Informativeness of Stock Prices
This paper presents both a new approach to studying the consequences of accounting choice and a unique sample to examine the effects of accounting choice in the R&D context. We investigate the effect of firms' decision to capitalize R&D expenditures on the amount of information about future earnings reflected in current stock returns, as captured by the association between current-year returns and future earnings (FERC). We use a sample of UK firms, which includes both R&D capitalizers and expensers. An important feature of our tests is our use of a two-equation system to control for the endogeneity of the accounting choice (i.e. self-selection). Proponents of capitalization claim that it enables management to better communicate information about the success of projects and their probable future benefits. Consistent with this, we find that capitalization is associated with higher FERC than expensing.
- …