| Under the new normal of China’s economic development,the Science and Technology Innovation Board was born.The establishment of the STB aims to provide a more convenient,flexible and transparent financing channel for technology and innovation enterprises,and to promote the reform and development of China’s capital market.At the same time,the board is expected to attract more technology and innovation enterprises to develop in China and promote the transformation and upgrading of the Chinese economy.The Science and Technology Innovation Board is a board with science and technology innovation as the main development direction,therefore,listed companies have high technical and technological content,usually involving high-tech,information technology,new materials,biomedicine and other fields.Enterprises listed on the Science and Technology Innovation Board generally need to have certain R&D capabilities and a high percentage of R&D expenditures.The pharmaceutical industry is an industry with high R&D investment,and the issue of capitalization of R&D expenditures is one of the important issues facing the Chinese pharmaceutical industry at present.Therefore,this paper focuses on the pharmaceutical manufacturing industry and analyzes the current situation of accounting treatment of R&D expenditures in the pharmaceutical industry by combining the process and characteristics of R&D activities in the pharmaceutical industry,and the study finds that the current criteria for capitalization of R&D expenditures in the pharmaceutical industry are not uniform,and the accounting policies for R&D expenditures vary among enterprises The study found that the current criteria for capitalization of R&D expenditures in the pharmaceutical industry are not uniform,and the accounting policies for R&D expenditures vary greatly among enterprises.Meanwhile,the capitalization rate of R&D expenditures in pharmaceutical industry is high,and the choice of accounting policy for R&D expenditures becomes a tool for enterprises’ surplus management.In order to gain a deeper understanding of the capitalization of R&D expenditures of pharmaceutical companies in KCI,this paper combines surplus management theory,information asymmetry theory and signaling theory,and uses literature analysis method,case study method and comparative analysis method to carry out research.This paper firstly introduces the definition of R&D activities and R&D expenditures,compares different accounting treatments of R&D expenditures,reviews the research of domestic and foreign scholars on accounting policies of R&D expenditures,and finds that conditional capitalization is the mainstream way regarding the accounting treatment of R&D expenditures at present.Then we analyze the capitalization of R&D expenditures in pharmaceutical industry with the process and characteristics of R&D activities in pharmaceutical industry,and find that the degree of capitalization of R&D expenditures in pharmaceutical industry is high,the conditions of capitalization are vague,and the accounting policies adopted by different enterprises are different and lack of comparability.Secondly,this paper takes Wicresoft as an example to discuss the capitalization of R&D expenditures of the KCI Board companies,reviewing the implementation path of Wicresoft’s registration approval on the KCI Board and focusing on the many inquiries and responses from the regulatory authorities on R&D expenditures.We analyze whether the accounting treatment of its R&D expenditures is reasonable in light of its R&D status and revenue status,and analyze the motivation behind it.The study found that Microsemi’s R&D expenditure accounting treatment was unclear in terms of capitalization recognition criteria,lacked industry comparability and internal comparability,advanced the capitalization point,and over-capitalized R&D expenditure.The reasons behind this are mainly to meet the listing requirements,to obtain higher pricing in the capital market,to beautify the statements and to satisfy the debt covenant conditions.In view of the problems of accounting treatment of R&D expenditures of Microchip Bio and its causes,this paper makes the following suggestions on accounting treatment of R&D expenditures of pharmaceutical enterprises in KCI: First,we should refine the accounting recognition standards of R&D expenditures in pharmaceutical industry and formulate a unified industry standard.Second,to improve the information disclosure mechanism,formulate the information disclosure guidelines for the pharmaceutical industry,and clarify the requirements for the adequacy of R&D information disclosure.Third,improve the internal control system of enterprises,encourage enterprises to strengthen internal control and risk management,establish a sound financial system,strengthen internal audit,and conduct regular self-assessment and disclosure. |
