Journal of Accounting and Management Information Systems (JAMIS)

A scientist in the board effect on recognition of R&D outcomes in private firms' reports

Vol. 15, Nr. 4/2016 ,   p683..709

Anna BiaƂek-Jaworska

Keywords:   R&D, capitalization, scientists, patent, grants

Abstract:   The paper aims to identify factors influencing the management decision of private companies regarding the capitalization of expenditures on R&D outcomes in the assets with impact of a scientist in the supervisory versus management board taken into account. Due to the strong impact of tax law on the accounts of private companies, the Polish context provides an interesting field for studies of R&D outcomes recognition since both expensing and capitalization of R&D costs are permitted within tax regulation, whereas Polish GAAP regulation considers R&D capitalization as similar to IAS 38 for successful developmental works. The research analyses data of 15,041 non-financial companies for years 2003-2013 used the logit panel and tobit panel methods. Results confirm that scientists on a supervisory board are more aware of the need to disclose information about the success of commercialization and persuade companies to capitalize expenditures on R&D outcomes. More indebted companies and entities that realize projects co-financed from grants for fixed tangible or intangible assets, are more likely to capitalize higher expenditures on R&D outcomes in their assets. Conversely, private firms with patents, greater growth opportunities or a scientist on the management board are less likely to capitalize spending on R&D outcomes.