Value Relevance of R&D Expenditure Before and after IFRS Mandatory Implementation: Evidence from France
International Journal of Management Sciences and Business Research, Vol. 5, Issue 8
15 Pages Posted: 11 Oct 2016
Date Written: Auguest 10, 2016
Abstract
The adoption of International Accounting Standards (IAS/IFRS) by an important and growing number of countries is one of the most important changes in the international accounting field. In France, there is a real change in the firm’s accounting practice related to the intangibles, and in particular accounting treatment for research and development 5 R&D) costs, following the adoption of international standards since January 2005. Consequently, the aim of our research is to analyze the impact of the adoption of International Accounting Standards (IAS/IFRS) on the value relevance of R&D expenditures based on a sample of 36 French companies (SBF120). The main results indicate that adopting IAS/IFRS did not affect the value relevance of expended R&D, whereas, applying the international standards positively affects the value relevance of capitalized R&D.
Keywords: capitalized R&D; expensed R&D; IFRS; value relevance
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