Motivational Research Policy Research And Development Spending Accounting

The accounting policy of capitalize R&D enhances the reliability, relevance andprudence of accounting information. Yet the specific implementation of the policy needshighly subjective as well as professional ability to judge which reduces the policy’soriginal purpose, which may cause earnings management and reduce the quality of theaccounting information.Therefore, the research of the choice of R&D policy has importanttheoretical and practical significance for the promotion of the development ofenterprises.This paper conducts a study on the R&D condition of biomedical and electronicinformation industry in the capital markets. It bases on profit smoothing, debt covenants,political cost, capital market as well as taxes motivations. It firstly conducts the research tofind out the motivations of R&D policy on capitalized R&D expenditure, then verifies theimpact of the motivations of R&D policy on accounting information quality from theperspective of earnings management.The results show that the accounting policy of capitalize R&D is impacted by profitsmoothing, debt covenants, political cost, capital market as well as taxes motivations.What’s more, enterprises manage earnings by R&D capitalization with the motivations ofdebt covenants and profit smoothing, which reduce the quality of the accountinginformation. But the motivations of political costs and capital market don’t have muchimpact on accounting information quality. According to the conclusions of the study, thearticle gives suggestions from the aspects of improving the disclosure of R&D expenditureinformation，strengthen tax management as well as R&D expenditures in accountingpolicies.