And the Conflicting Forces that Shape Financial Accounting: An Empirical Analysis
2 Related Literature: Empirical Research on Accounting for R&D
23 2 Related Literature: Empirical Research on Accounting for R&D The two research papers at the core of this thesis are in the spirit of the relev- ance-reliability trade-off which is at the heart of the debate on the appropriate accounting treatment of R&D outlays. For this reason the related literature sec- tion is divided into two major subsections dealing with aspects of relevance and reliability, respectively. The subsection related to aspects of relevance covers studies that are at least to some extent motivated by investigating the question if the accounting treatment of R&D outlays matters to either equity or debt inves- tors. The subsection on aspects of reliability discusses studies that address issues like earnings management and the uncertainty of future benefits. Earnings man- agement through the accounting treatment of R&D outlays affects reliability as it causes accounting information to be erroneous, biased, and not faithful any more. As discussed in section 1.1 applying a broader definition of reliability the relatively high uncertainty of future benefits associated with R&D investments can also be interpreted as a feature of reliability. Overall, this section aims to provide an overview on the empirical studies that have been conducted on the accounting treatment of R&D outlays. Such an overview allows integrating the research conducted in this thesis into existing literature and identifying its con- tribution to this literature. 2.1 Accounting for R&D and the Relevance of Financial Accounting Information As discussed in section 1.2 research documents...
You are not authenticated to view the full text of this chapter or article.
This site requires a subscription or purchase to access the full text of books or journals.
Do you have any questions? Contact us.Or login to access all content.