Abstract
Under certain conditions, Canadian and international accounting standards allow firms to present R&D costs in their balance sheets (capitalization). This article analyzes the determinants of new capitalizations of R&D costs by focusing on positive accounting theory and the influence of the CEO. Based on a sample of 440 observations of Canadian firms between the years 2000 and 2003, the results show that the size, debt load, presence of a CEO who holds an important but not majority block of shares, and CEO’s years of seniority all influence the decision to present new capitalizations of R&D costs. The presence on the board of an important stockholder other than the CEO attenuates the influence of the CEO.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.