The positive externalities of IFRS R&D capitalization: enhanced voluntary disclosure

• 成果类型: Article
• 署名作者: Chen, Ester; Gavious, Ilanit; Lev, Baruch
• 署名单位: Ben-Gurion University of the Negev; New York University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-017-9399-x
• 发表日期: 2017
• 页码: 677-714
• 关键词: VALUE-RELEVANCE; BUSINESS PERFORMANCE; Intangibles; INNOVATION; earnings

摘要

Studies comparing IFRS with U.S. GAAP generally focus on differences in the attributes and consequences of the recognized financial items. We, in contrast, focus on voluntary disclosure resulting from arguably the most significant difference between IFRS and GAAP: the capitalization of development costs-the D of R&D-required by IFRS but prohibited by GAAP. Using a sample of Israeli high-technology and science-based firms, some using IFRS and others U.S. GAAP, we document a significant externality of IFRS development cost capitalization in the form of extensive voluntary disclosure of forward-looking information on product pipeline development and its expected consequences. We show that this disclosure is value-relevant over and above the mandated financial information, including the capitalized R&D asset. We also show that the capitalized development costs (an asset) is highly significant in relation to stock prices, and enhances the relevance of the voluntary disclosures.