Accounting and Auditing Studies

Accounting and Auditing Studies

Develop a Model for Disclosure Research and Development Activities in Iranian Companies with an Emphasis on Accounting Standards

Document Type : Original Article

Authors
Mohsen Hasan Nataj Kordi 1
Yahya Kamyabi 2
Ghodratolla Barzegar 3
1 Ph.D. Candidate, Department of Accounting, University of Mazandaran, Babolsar, Iran
2 Associate Prof., Department of Accounting, Faculty of Economics, University of Mazandaran, Babolsar, Iran
3 Assistant Prof., Department of Accounting, University of Mazandaran, Babolsar, Iran
10.22034/iaas.2023.172685
Abstract
Today, although many companies believe in the necessity of disclosing their research and development (R&D) activities, the reporting extend and limits are yet to be adequately clarified as far as such a disclosure is concerned. This subject matter is pretty immature in the Iranian literature, where dimensions of the R&D activities are not well understood and Iranian companies are suffering from lack of any specific model for disclosing such information. Indeed, as of writing this report, no significant Iranian work has elaborated on the practical concept of disclosing R&D activities and the nature, type, and content of such a disclosure report. Accordingly, the present research seems to be a necessary step for providing some insight into this emerging topic. This study is aimed at formulating a model for disclosing R&D activities in Iranian companies with an emphasis on accounting standards. Reviewing relevant international procedures and guidelines and then collecting the required data through a questionnaire followed by confirmatory factor analysis and path analysis, this research presents, in a comprehensive framework, the dimensions, components, and criteria of a disclosure report for R&D activities of companies. Results of the path analysis and proper parameters for fitting the resultant structural model show that, among the 9 components investigated in this research, except for only one component (i.e., general aspects of disclosing R&D activities), the other 8 (i.e., (1) product development stages, (2) in-progress research projects, (3) patents and trademarks, (4) strategic dimensions and aspects of R&D activities, (5) accounting aspects of R&D activities, (6) current expenses of R&D activities, (7) financing aspects of R&D activities, and (8) future expenses of R&D activities) were significant and representative for justifying the model of disclosing R&D activities of Iranian companies. Accordingly, altogether, they can be seen as an efficient and comprehensive tool for determining the extent of disclosure of R&D activities in Iranian companies. It is expected that the presentation of this model and further recognition of its factors can help increase the clarity and efficiency of the capital market, improve the social wellbeing, and hence provide the required basis for disclosing the R&D activities in companies, which requires support from top management, institutional shareholders, and relevant authorities and institutions in the field of firm reporting, including the Securities and Exchange Organization of Iran, so as to boost accountability to stakeholders.
Keywords
R&D activities
accounting standards
Develop a Model
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Accounting and Auditing Studies
Volume 12, Issue 45
Spring 2023
Pages 81-104