Research On Earnings Management Of R & D Expenditure Capitalization Of Blue Mountain

With the implementation of the national strategy of innovation-driven development,the development of enterprises led by technological innovation has gradually become a major trend.In order to encourage independent innovation of enterprises,the government provides policy support from many aspects,such as accounting system,tax incentives,capital market and financial subsidies.Under this background,in 2006 our country issued the accounting standards for enterprises no.6-intangible assets(hereinafter referred to as the accounting standards no.6)and started implementation in 2007,stipulated the company's research and development spending from all the expenses to conditional capitalization,the accounting system is conducive to encourage enterprises for independent innovation,promote the development of economic transformation and upgrading to high quality.However,at the same time,we found that some technology-intensive enterprises would use accounting policies of R&D expenditures to manage earnings.In this paper,Blue Mountain Technology Company,a private high-tech enterprise on the New Third Board(NEEQ),is selected as the research object.Based on the summary of relevant literature on R&D expenditure and earnings management,the development history and financial status of Blue Mountain Technology Company are briefly introduced firstly,and then the overall situation of R&D expenditure and capitalization and expensed accounting treatment of Blue Mountain Technology Company are introduced in detail.Combined with the current situation of enterprises,the motivation of earnings management is analyzed from four aspects: earnings smoothing motivation,refinancing demand motivation,debt contract motivation and share price promotion by delivering good news to the market.Based on the motivation analysis of earnings management,it is revealed that the specific ways of capitalized earnings management of R&D expenditure of Blue Mountain Technology Company are as follows: confirm the capitalization time point of R&D expenditure in advance,delay the recognition of intangible assets of development expenditure,incomplete disclosure of R&D input information,and arbitrary change of the amortization period of intangible assets.After understanding the specific ways of capitalized earnings management of R&D expenditure of Blue Mountain Technology,this paper first uses financial data to analyze the enterprise's R&D expenditure,and then uses the modified Jones model to measure the degree of earnings management.It concludes that Blue Mountain Technology conducts earnings management by adjusting the capitalization degree of R&D expenditure.After identifying the capitalized earnings management of R&D expenditure,this paper considers the economic impact of earnings management from three perspectives: firm,investor and capital market.Based on the analysis of typical case companies,this paper summarizes the problems existing in the capitalized earnings management of R&D expenditure of private high-tech enterprises on the New Third Board,and puts forward countermeasures and suggestions from three aspects: improving the accounting policies of R&D expenditure,strengthening the supervision of information disclosure and guiding the optimal allocation of capital market resources.