IAS 38 and accounting for development expenses: are they capitalized opportunistically or reliably?

IAS 38 et activation des dépenses de développement: activation opportuniste ou informative ?

Guillaume Dumas () and Isabelle Martinez ()
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Guillaume Dumas: UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse
Isabelle Martinez: UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse

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Abstract: Under IFRS (IAS 38), are development expenses capitalized opportunistically or reliably? Results show that (i) development expenses are capitalized in order to meet earnings targets (development expenses are capitalized opportunistically) and (ii) when managers have no incentive to capitalized in order to achieve earnings targets, amounts capitalized are associated with futures economic benefits (development expenses are capitalized reliably). Furthermore, the presence of an audit committee restricts the opportunist capitalization of development expenses. The R&D tax credit influences positively the capitalization of development expenses.

Date: 2015-05
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Published in Revue Française de Gestion, 2015, 41 (249), pp.93-111. ⟨10.3166/RFG.249.93-111⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03018808

DOI: 10.3166/RFG.249.93-111

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