Research On The Choice And Driving Factors Of China Micro Corporation's R&D Expenses Accounting Polic

In recent years,with the acceleration of social development and scientific and technological progress,high-tech enterprises have invested more and more in R&D.Whether R&D investment should be recorded into current profit and loss or capitalized is always a widely debated issue in accounting profession.The U.S.Accounting Standards Board(FASB)advocates expensing R&D expenditures as they are incurred based on the principle of prudence,while Dutch accounting standards provide that R&D expenditures can be capitalized as long as they are expected to bring benefits to enterprises.International accounting standards adopted the compromise accounting treatment,divided the R&D activities into two stages,the research stage and the development stage.In 2007,after the formal implementation of China’s new accounting standards,the accounting treatment of R&D expenses is similar to international standards,which is allowing listed companies to carry out "conditional capitalization" of R&D investment.According to the new accounting standards,R&D activities should be divided into two stages,the research stage and the development stage.Advanced Micro-Fabrication Equipment Inc.China(AMEC)is a china-based,global micro processing high-end equipment company,providing competitive high-end equipment and high-quality services for the IC and pan-semiconductor industry,mainly adopting the mode of independent research and development,developed a number of chip equipment with independent intellectual property rights.Semiconductor enterprises usually have the characteristics of large R&D investment,long R&D process,complex R&D process,etc.Among the listed companies on the SSE STAR Market,AMEC is the only semiconductor enterprise that choose to capitalize R&D expenses.Its selection and driving factors of R&D expense accounting policies have certain research significance and representativeness.This paper combed the AMEC’s development model,development process and the accounting treatment of corresponding research and development of various nodes,doing the detailed analyses of AMEC’s R&D cost capitalization to make sure its accounting treatment is in compliance with the accounting standards for enterprises,and the requirements of the relevant combination of SSE STAR market,the detailed situation of R&D cost capitalization and audit focus is also studied.Based on the financial statements and public financial data of AMEC as the basis of quantitative analysis,combined with the development characteristics and R&D situation of the company,aiming at the accounting policy choice of the company and the economic consequences,this paper conducts an analysis and research on the driving factors of the accounting policy choice of the R&D expense of the company.The research finds that: driving factors of AMEC’s R&D cost capitalization policy choice mainly for smoothing earnings potential motive,debt contract incentive motivation and compensation contracts,capital market motivation,mainly related to smooth profits with the management,enhance the level of compensation,access to bank debt financing and equity capital markets higher valuations,and the correlation of tax incentives and political cost motive is smaller.Finally,through the research on the driving factors of accounting policies for R&D expenses of AMEC,the motivation of using accounting policy earnings management is evaluated,hoping to promote the relevant regulatory authorities to further revise and improve accounting standards,and avoid the management with bad motives to seek improper benefits by taking advantage of loopholes in the rules.It is also hoped to provide reference and inspiration to the listed companies that plan to capitalize R&D expenses in the future in the formulation of internal control system of R&D activities,R&D expense accounting and collection standards.