| The pharmaceutical industry is a strategic new industry related to the people’s livelihood,economic development and national security,and is a major component of the national economy.In recent years,the pharmaceutical industry has achieved rapid development in recent years,and R&D investment has increased year by year,and it needs more specific and detailed information disclosure to meet the needs of investors.At present,there are no clear and uniform regulations on the timing of capitalization of R&D expenditures of pharmaceutical industry,and the accounting treatment of R&D expenditures varies greatly among enterprises in the industry,which makes comparability weaker and there are many problems in the disclosure of R&D expenditures.It is worth studying and exploring how pharmaceutical companies can better balance the R&D risk and truly reflect the enterprise value in their accounting treatment of R&D expenditures.In this paper,Hengrui Pharmaceutical,a typical representative enterprise in the pharmaceutical industry,is selected as the research object.Firstly,the basic situation of the accounting treatment of R&D expenditures of pharmaceutical enterprises is reviewed,and then a specific analysis is conducted with the case of Hengrui Pharmaceuticals,and a comparative study is conducted with Squire Pharmaceuticals,which adopts different accounting policies.The analysis reveals that before the change of accounting estimate,Hengrui Pharma chose to expense all R&D expenditures,which brings obvious tax saving effect to the company and conveys confidence in its own performance to investors,but it is not consistent with the actual situation of the company’s R&D and does not truly reflect the enterprise value.After the change of accounting estimate,the company uses the entry into clinical phase III as the capitalization condition to take into account the real existence of R&D risks and the real value and market potential of the enterprise.In addition,a comparison between Hengrui Pharmaceutical and Squire Sanders shows that the capitalization condition of obtaining clinical approval can reduce the pressure on the company’s performance in the short term and allow more resources to be invested in R&D,but the company needs to bear the huge risk of R&D failure.This paper analyzes the three main accounting treatments of R&D expenditures for Hengrui Pharmaceuticals and Squire Sanders Pharmaceuticals and makes the following recommendations: strengthen external supervision and play the role of CPA as a "gatekeeper";establish a dynamic evaluation mechanism and improve the professional quality of financial decision;improve information disclosure requirements and use inquiries as information supplements. |
