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R&D expenditures: Accounting choices and market price reactions

This paper examines the value relevance of R&D reporting among public listed companies in Malaysia for the years 2000 and 2001, subsequent to the introduction of FRS 109, Accounting for Research and Development (formerly known as MASB 4).FRS 109 states that a firm should expense its research cos...

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Main Authors: Abdul Latif, Rohaida, Taufil Mohd, Kamarun Nisham, Abu Bakar, Robiah, Wan Hussin, Wan Nordin, Ku Ismail, Ku Nor Izah
Format: Monograph
Language:English
English
Published: Universiti Utara Malaysia 2005
Subjects:
H Social Sciences (General)
Online Access:http://repo.uum.edu.my/7833/1/Roh.pdf
http://repo.uum.edu.my/7833/3/1.Rohaida%20Abdul%20Latif.pdf
http://repo.uum.edu.my/7833/
http://lintas.uum.edu.my:8080/elmu/index.jsp?module=webopac-l&action=fullDisplayRetriever.jsp&szMaterialNo=0000235935
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spelling my.uum.repo.78332014-07-13T00:31:06Z http://repo.uum.edu.my/7833/ R&D expenditures: Accounting choices and market price reactions Abdul Latif, Rohaida Taufil Mohd, Kamarun Nisham Abu Bakar, Robiah Wan Hussin, Wan Nordin Ku Ismail, Ku Nor Izah H Social Sciences (General) This paper examines the value relevance of R&D reporting among public listed companies in Malaysia for the years 2000 and 2001, subsequent to the introduction of FRS 109, Accounting for Research and Development (formerly known as MASB 4).FRS 109 states that a firm should expense its research costs and could capitalize the development cost if the latter is expected to bring future benefits.Otherwise, the development expenditure is to be expensed.Test results based on Ohlson’s (1995) valuation model shows that for capitalizers, the amount of R&D expenditure, either expensed or capitalized, influences the stock prices positively.As for the expensers, even though the amount expensed influences stock prices, this relationship is driven by outliers; when we dropped the outliers, the result is no longer significant.These results indicate that R&D activities of capitalizers are expected to bring future benefits and consequently lead to higher prices while the R&D activities of expensers are more difficult to evaluate given a small sample size and the presence of outliers. Universiti Utara Malaysia 2005 Monograph NonPeerReviewed application/pdf en http://repo.uum.edu.my/7833/1/Roh.pdf application/pdf en http://repo.uum.edu.my/7833/3/1.Rohaida%20Abdul%20Latif.pdf Abdul Latif, Rohaida and Taufil Mohd, Kamarun Nisham and Abu Bakar, Robiah and Wan Hussin, Wan Nordin and Ku Ismail, Ku Nor Izah (2005) R&D expenditures: Accounting choices and market price reactions. Project Report. Universiti Utara Malaysia. (Unpublished) http://lintas.uum.edu.my:8080/elmu/index.jsp?module=webopac-l&action=fullDisplayRetriever.jsp&szMaterialNo=0000235935
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
English
topic H Social Sciences (General)
spellingShingle H Social Sciences (General)
Abdul Latif, Rohaida
Taufil Mohd, Kamarun Nisham
Abu Bakar, Robiah
Wan Hussin, Wan Nordin
Ku Ismail, Ku Nor Izah
R&D expenditures: Accounting choices and market price reactions
description This paper examines the value relevance of R&D reporting among public listed companies in Malaysia for the years 2000 and 2001, subsequent to the introduction of FRS 109, Accounting for Research and Development (formerly known as MASB 4).FRS 109 states that a firm should expense its research costs and could capitalize the development cost if the latter is expected to bring future benefits.Otherwise, the development expenditure is to be expensed.Test results based on Ohlson’s (1995) valuation model shows that for capitalizers, the amount of R&D expenditure, either expensed or capitalized, influences the stock prices positively.As for the expensers, even though the amount expensed influences stock prices, this relationship is driven by outliers; when we dropped the outliers, the result is no longer significant.These results indicate that R&D activities of capitalizers are expected to bring future benefits and consequently lead to higher prices while the R&D activities of expensers are more difficult to evaluate given a small sample size and the presence of outliers.
format Monograph
author Abdul Latif, Rohaida
Taufil Mohd, Kamarun Nisham
Abu Bakar, Robiah
Wan Hussin, Wan Nordin
Ku Ismail, Ku Nor Izah
author_facet Abdul Latif, Rohaida
Taufil Mohd, Kamarun Nisham
Abu Bakar, Robiah
Wan Hussin, Wan Nordin
Ku Ismail, Ku Nor Izah
author_sort Abdul Latif, Rohaida
title R&D expenditures: Accounting choices and market price reactions
title_short R&D expenditures: Accounting choices and market price reactions
title_full R&D expenditures: Accounting choices and market price reactions
title_fullStr R&D expenditures: Accounting choices and market price reactions
title_full_unstemmed R&D expenditures: Accounting choices and market price reactions
title_sort r&d expenditures: accounting choices and market price reactions
publisher Universiti Utara Malaysia
publishDate 2005
url http://repo.uum.edu.my/7833/1/Roh.pdf
http://repo.uum.edu.my/7833/3/1.Rohaida%20Abdul%20Latif.pdf
http://repo.uum.edu.my/7833/
http://lintas.uum.edu.my:8080/elmu/index.jsp?module=webopac-l&action=fullDisplayRetriever.jsp&szMaterialNo=0000235935
_version_ 1644279655232962560
score 13.211869

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