연구개발비와 초과이익간의 상관성이 가치평가에 미치는 영향 = The Effect of the Association Between R&D Expenses and Abnormal Earnings on Equity Valuation

다국어 초록 (Multilingual Abstract)

This study examines the relationship between abnormal earnings and research and development expenditures, and its effect on equity valuations. The first autocorrelation between two consecutive periods` abnormal earnings in the Ohlson model (1995) measures how persistent abnormal earnings are over time. Examination of components of the persistence of abnormal earnings indicates that the effect of research and development expenditures in year t on abnormal earnings in year t or t+1 systematically affects pricing multiples on research and development expenditures. If the lagged effect of year t`s research and development expenditures on year t+1`s abnormal earnings is great, research and development expenditures generate more future revenue so that expensing them as incurred distorts revenue-expense matching. On the other hand, the greater contemporaneous effect of year t`s research and development expenditures on year t`s abnormal earnings implies that they do not generate significant future revenue and that there is little gained by capitalizing them with respect to revenue-expense matching. Specifically, it is hypothesized that: (i) the greater the lagged effect of year t`s research and development expenditures on year t+1`s abnormal earnings, the larger the pricing multiples on research and development expenditures; and, (ii) the greater the contemporaneous effect of year t`s research and development expenditures on year t`s abnormal earnings, the smaller the pricing multiples on research and development expenditures. The sample consists of 275 non-banking firms (1,426 firm-years) listed on the Korean Stock Exchange with a December fiscal year-end over 1993-2001. Empirical findings support the expectation; i.e., (i) the greater the lagged effect of current year`s research and development expenditures on one-year-ahead abnormal earnings, the larger the pricing multiples on the current year`s research and development expenditures, and (ii) the greater the contemporaneous effect of the current year`s research and development expenditures on the current year`s abnormal earnings, the smaller the pricing multiples on the current year`s research and development expenditures. These results suggest that accounting decisions concerning research and development expenditures be considered carefully in light of their effect on future earnings with respect to proper revenue-expense matching instead of arguing for uniform capitalization of R&D expenditures. In this regard, it would be beneficial to distinguish between successful and non-successful research and development expenditures by examining the lagged/contemporaneous effect of those expenditures on future/current abnormal earnings. Such consideration will enhance the value relevance of accounting information.

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