Voluntary Disclosure in R&D‐Intensive Industries *

Voluntary Disclosure in R&D‐Intensive Industries * Contemporary Accounting Research Vol. 24 No. 2 (Summer 2007) pp. 489–522 © CAAA Contemporary Accounting Research beyond the early stages of operations and are reporting operating profits. I examine three types of R&D-related disclosures — R&D spending, R&D projects in progress, and development-stage R&D. Because the primary analyses involve shortterm analysts’ forecasts, the informativeness of basic research is not investigated. Whether managers will choose to disclose detailed R&D-related information is unclear. Instead, a manager could attempt to reduce uncertainty about future operations through alternative disclosures, such as an earnings or a sales forecast. These have the benefit of not providing specific information about the firm’s R&D activities to competitors. Therefore, I first provide some descriptive information about what types of disclosures managers are making about R&D activities. I find that all companies provide some information about R&D activities, although the majority of firms make descriptive disclosures only. Information on R&D projects in process tends to be descriptive in nature and is disclosed in both annual reports and nonannual report sources. In contrast, managers provide both numerical and descriptive information about development-stage R&D and the majority of this information is provided in nonannual report sources. I conclude that in http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Contemporary Accounting Research Wiley

Voluntary Disclosure in R&D‐Intensive Industries *

Contemporary Accounting Research, Volume 24 (2) – Jun 1, 2007

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Publisher
Wiley
Copyright
2007 Canadian Academic Accounting Association
ISSN
0823-9150
eISSN
1911-3846
D.O.I.
10.1506/G3M3-2532-514H-1517
Publisher site
See Article on Publisher Site

Abstract

Contemporary Accounting Research Vol. 24 No. 2 (Summer 2007) pp. 489–522 © CAAA Contemporary Accounting Research beyond the early stages of operations and are reporting operating profits. I examine three types of R&D-related disclosures — R&D spending, R&D projects in progress, and development-stage R&D. Because the primary analyses involve shortterm analysts’ forecasts, the informativeness of basic research is not investigated. Whether managers will choose to disclose detailed R&D-related information is unclear. Instead, a manager could attempt to reduce uncertainty about future operations through alternative disclosures, such as an earnings or a sales forecast. These have the benefit of not providing specific information about the firm’s R&D activities to competitors. Therefore, I first provide some descriptive information about what types of disclosures managers are making about R&D activities. I find that all companies provide some information about R&D activities, although the majority of firms make descriptive disclosures only. Information on R&D projects in process tends to be descriptive in nature and is disclosed in both annual reports and nonannual report sources. In contrast, managers provide both numerical and descriptive information about development-stage R&D and the majority of this information is provided in nonannual report sources. I conclude that in

Journal

Contemporary Accounting ResearchWiley

Published: Jun 1, 2007

References

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