Advanced

The Economic Consequences on Investment Decisions in Development Activities Due to the Imposition to Expense Development Costs for SMEs: An Experimental Study Authors: Daniele Gatti

Gatti, Daniele LU and Nurenza, Fitriandika LU (2017) BUSN79 20171
Department of Business Administration
Abstract
Purpose:
The purpose of this study is to investigate the impact of the prohibition to capitalise any development cost in SMEs, as required by IFRS for SMEs (section 18.14), on SMEs’ managers’ decisions on investments in development activities.

Methodology:
The methodology applied in this study is represented by an experimental approach structured in simulations built with Microsoft Excel. The empirical results are then interpreted with the support of two-way mixed ANOVA in SPSS.
Theoretical perspective:
This study is based on economic consequences theory, as well as previous studies that investigate the effects of certain accounting regulation.

Empirical foundation:
The empirical findings were collected through simulations sent... (More)
Purpose:
The purpose of this study is to investigate the impact of the prohibition to capitalise any development cost in SMEs, as required by IFRS for SMEs (section 18.14), on SMEs’ managers’ decisions on investments in development activities.

Methodology:
The methodology applied in this study is represented by an experimental approach structured in simulations built with Microsoft Excel. The empirical results are then interpreted with the support of two-way mixed ANOVA in SPSS.
Theoretical perspective:
This study is based on economic consequences theory, as well as previous studies that investigate the effects of certain accounting regulation.

Empirical foundation:
The empirical findings were collected through simulations sent out to 79 Master’s students in Accounting and Finance enrolled at LUSEM in 2016/2017, out of which 25 answered the simulation. These 25 responses represent the empirical foundation of this research.

Conclusions:
Based on statistically significant findings, this study concludes that an accounting regulation which mandates the expensing of development costs decreases the tendency of managers to spend money on development projects and causes them to prefer investments in PPE rather than in development activities. (Less)
Please use this url to cite or link to this publication:
author
Gatti, Daniele LU and Nurenza, Fitriandika LU
supervisor
organization
course
BUSN79 20171
year
type
H1 - Master's Degree (One Year)
subject
keywords
Economic consequences, IFRS for SMEs, SMEs, Development cost, Investment decision making
language
English
id
8918559
date added to LUP
2017-07-04 14:37:23
date last changed
2017-07-04 14:37:23
@misc{8918559,
  abstract     = {Purpose:
The purpose of this study is to investigate the impact of the prohibition to capitalise any development cost in SMEs, as required by IFRS for SMEs (section 18.14), on SMEs’ managers’ decisions on investments in development activities.

Methodology:
The methodology applied in this study is represented by an experimental approach structured in simulations built with Microsoft Excel. The empirical results are then interpreted with the support of two-way mixed ANOVA in SPSS.
Theoretical perspective:
This study is based on economic consequences theory, as well as previous studies that investigate the effects of certain accounting regulation.

Empirical foundation:
The empirical findings were collected through simulations sent out to 79 Master’s students in Accounting and Finance enrolled at LUSEM in 2016/2017, out of which 25 answered the simulation. These 25 responses represent the empirical foundation of this research.

Conclusions:
Based on statistically significant findings, this study concludes that an accounting regulation which mandates the expensing of development costs decreases the tendency of managers to spend money on development projects and causes them to prefer investments in PPE rather than in development activities.},
  author       = {Gatti, Daniele and Nurenza, Fitriandika},
  keyword      = {Economic consequences,IFRS for SMEs,SMEs,Development cost,Investment decision making},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Economic Consequences on Investment Decisions in Development Activities Due to the Imposition to Expense Development Costs for SMEs: An Experimental Study Authors: Daniele Gatti},
  year         = {2017},
}