search query: @author Sougiannis, T. / total: 4
reference: 3 / 4
| Author: | Lev, B. Sougiannis, T. |
| Title: | The capitalization, amortization, and value-relevance of R&D |
| Journal: | Journal of Accounting & Economics
1996 : FEB, VOL. 21:1, p. 107-138 |
| Index terms: | FINANCE MARKETS R&D |
| Language: | eng |
| Abstract: | GAAP mandates the full expensing of R&D in financial statements. That is presumably because of concerns with the objectivity, reliability, and value-relevance of R&D capitalization. To address these concerns, the R&D capital of a large sample of public companies is estimated and these estimates are found to be statistically reliable and in economical terms meaningful. The reported earnings and book values of sample firms are adjusted for the R&D capitalization. Such adjustments are found to be value-relevant to investors. Finally, a significant intertemporal association btw. firms' R&D capital is documented as well as subsequent stock returns, suggesting either a systematic mispricing of the shares of R&D intensive companies, or a compensation for an extra-market risk factor associated with R&D. |
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