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Accounting for intangible assets – insights from meta-analysis of R&D research

Accounting for intangible assets – insights from meta-analysis of R&D research The knowledge- and Internet-based economy demands a reexamination of the accounting treatment for intangibles and a thorough understanding of the empirical evidence on this topic.Design/methodology/approachThe study reviews the literature on research and development (R&D), a specific internally developed intangible asset, using meta-analysis techniques that allow to highlight the areas of consensus and disagreement in quantitative empirical results. The literature the authors review addresses four main research questions on (1) the determinants of the decision to capitalize R&D, (2) stock market-based outcomes of capitalizing R&D, (3) firm-based outcomes related to expensing R&D and (4) stock market-based outcomes of expensing R&D.FindingsThe authors find higher value relevance of capitalized compared with expensed R&D. There is, however, little robust evidence on the determinants of the capitalization decision and the characteristics of capitalizers.Originality/valueThe authors conclude by highlighting future research that can allow accounting academics to contribute to standard setting. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting Literature Emerald Publishing

Accounting for intangible assets – insights from meta-analysis of R&D research

Jeny, Anne; Moldovan, Rucsandra
Journal of Accounting Literature , Volume 44 (1): 32 – Apr 12, 2022
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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0737-4607
eISSN
2452-1469
DOI
10.1108/jal-11-2021-0004
Publisher site
See Article on Publisher Site

Abstract

The knowledge- and Internet-based economy demands a reexamination of the accounting treatment for intangibles and a thorough understanding of the empirical evidence on this topic.Design/methodology/approachThe study reviews the literature on research and development (R&D), a specific internally developed intangible asset, using meta-analysis techniques that allow to highlight the areas of consensus and disagreement in quantitative empirical results. The literature the authors review addresses four main research questions on (1) the determinants of the decision to capitalize R&D, (2) stock market-based outcomes of capitalizing R&D, (3) firm-based outcomes related to expensing R&D and (4) stock market-based outcomes of expensing R&D.FindingsThe authors find higher value relevance of capitalized compared with expensed R&D. There is, however, little robust evidence on the determinants of the capitalization decision and the characteristics of capitalizers.Originality/valueThe authors conclude by highlighting future research that can allow accounting academics to contribute to standard setting.

Journal

Journal of Accounting Literature – Emerald Publishing

Published: Apr 12, 2022

Keywords: Research and development; Intangible assets; Capitalization; Meta-analysis

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