Accounting for Intangible Assets—Insights from Meta-Analysis of R&D Research

57 Pages Posted: 13 Feb 2018 Last revised: 13 Jul 2020

See all articles by Anne Jeny

Anne Jeny

ESSEC Business School; IESEG School of Management

Rucsandra Moldovan

John Molson School of Business, Concordia University

Date Written: July 4, 2020

Abstract

The knowledge- and Internet-based economy demands a re-examination of the accounting treatment for intangibles and a thorough understanding of the empirical evidence on this topic. We review the literature on research and development (R&D), a specific internally developed intangible asset, using meta-analysis techniques that allow us to highlight the areas of consensus and disagreement in quantitative empirical results. The literature we 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. We 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. We conclude by highlighting future research that can allow accounting academics to contribute to standard setting.

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

JEL Classification: M4

Suggested Citation

Jeny, Anne and Moldovan, Rucsandra, Accounting for Intangible Assets—Insights from Meta-Analysis of R&D Research (July 4, 2020). Available at SSRN: https://ssrn.com/abstract=3120397 or http://dx.doi.org/10.2139/ssrn.3120397

Anne Jeny (Contact Author)

ESSEC Business School ( email )

Av Bernard Hirsch
BP 50105
Cergy-Pontoise, 95021
France

IESEG School of Management ( email )

Socle de la Grande Arche
1 Parvis de la Defense
Puteaux, Paris 92800
France

Rucsandra Moldovan

John Molson School of Business, Concordia University ( email )

Montreal, Quebec H3G 1M8
Canada
+1-514-848-2424 ext 2528 (Phone)

HOME PAGE: http://www.concordia.ca/jmsb/faculty/rucsandra-moldovan.html

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