Accounting treatment of research and development expenditures and firms performance: evidence from Greek listed firms in the Athens Stock Exchange

Abstract

It is common sense that R&D investments could be a vehicle for financial development. However these investments have been related with uncertain financial outcome. As a result of this different approaches, for the reporting of the expenditure on R&D, have been stated and also have been adopted in the Accounting Standards of many countries. We have investigated in this research study the impact of R&D expenditure on firms' value and their financial performance. For this purpose we explored 60 listed firms in the Athens Stock Exchange for the period 2011-2013 and we found evidence for significant differences in the financial performance between R&D oriented and not R&D oriented in the period of Greek financial crisis. We used and analysed reported data, in the financial statements of firms, according to the International Accounting Standards.