Department/School
Accounting
Date of this version
Fall 10-11-2012
Document Type
Paper
Abstract
This paper contributes to the current debate on accounting treatment of R&D expenditures. We considered two different measures of future benefits to a firm, sales revenue and operating cash flows. We provide evidence that R&D expenditures do not generate more uncertain future sales revenue or operating cash flows compared to capital expenditures. In terms of sales revenue, R&D expenditures generate significantly less uncertain future benefits compared to capital expenditures. And in terms of operating cash flows, our results do not provide conclusive evidence that whether R&D expenditures generate more uncertain future benefits than capital expenditures or not.
Volume
12
Issue
3
Published in
Journal of Accounting and Finance
Citation/Other Information
Asdemir, O., Mufti M., & Sheikh, F. (2012). R&D Uncertainty in Future Benefits. Journal of Accounting and Finance, 12(3), 148-161.