Today, we still do not know how to account for R&D activities.
Corinne Bessieux-Ollier and Elisabeth Walliser, accountancy researchers and authors , have shown the semantic confusion that persists between different terms: intangible capital, intellectual capital, intangible assets and intangible assets. This is not without problems for companies because the potential for innovation is not, in our opinion, limited to the management of the patent and trademark portfolio .
In addition, to the question asked, "are there any research articles defining R&D from an accounting point of view", the answer was: "R&D costs are today defined and framed by standards that may differ from one company to another, from one country to another. But it is still difficult to define what R&D is and how to account for it.
Confusion persists from an accounting point of view between research and development
In the opinion of Marie Laure Colombini, Vice President of the Regional Company of Statutory Auditors of Toulouse, we still do not know how to distinguish between research and development.
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This does not seem to us to be without impact on the accounting treatment of R&D activities, as Elisabeth Walliser has specified that research costs can never be capitalized on the balance sheet (capitalized), whereas development costs can be capitalized under certain conditions.
Difficulty in collecting accounting information relating to innovation
Marie Laure Colombini also testifies to the difficulties in collecting the accounting information necessary, in particular, for the preparation of financing applications: collecting tangible elements, tracing the time spent on R&D activity, taking into account the technical nature of the products. What about, under these conditions, SMEs that have neither the time nor the resources to be able to structure their information system in such a way as to encourage the feedback of the information requested?
The return on investment of innovations is still too small to measure NPV or cash flow.
Much research in accounting focuses on methods of measuring the profitability of an investment (e.g. NPV, cash flow). The questions are: what to measure, how to measure? The answers to these questions are crucial for financing innovation.
Research in innovation management shows that the financial return on investment in innovation must also be assessed in terms of the creation of a competitive potential for the enterprise that can be valorised later or that will allow it, more radically, to remain in rapidly changing markets. However, taking these criteria into account requires a multi-project approach (project portfolio management) and a long-term strategy, whereas, unfortunately, holders of capital likely to be invested, directly or indirectly, in innovation persist in favouring the criterion of a rapid return on investment on each project taken individually.
When will cross-disciplinary research work in management sciences, involving researchers in accounting and innovation management, carried out in partnership with chartered accountants, auditors and companies?
1] E. Walliser and C. Bessieux-Ollier (dir.), Le capital immatériel de l'entreprise : un défi pour les comptables et les managers, EMS, June 2011, 174p. E. Walliser and C. Bessieux-Ollier (dir.), Le capital immatériel : " identification, mesure et pilotage ", special report of the Revue Française de Gestion, vol. 36, 207, October 2010.
2] Notably a study in progress within the GTI Group (cf. the Who are we? section) which we will have the opportunity to discuss again.
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Sandrine Fernez-Walch, (Site MI http://innovationmanagement.fr/) Lecturer authorized to direct research in management sciences. Responsible for the Master 1 Management of the Social and Health Enterprise.