Do We Need a New Approach to R&D Works in Financial Reporting?
Artur Hołda
Cracow University of Economics, College of Management and Quality SciencesCracow, Poland
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e Paweł Łojek
Andrzej Frycz Modrzewski Krakow University, Faculty of Political Sciences and Social CommunicationCracow, Poland
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17 ott 2024
INFORMAZIONI SU QUESTO ARTICOLO
Pubblicato online: 17 ott 2024
Pagine: 346 - 363
DOI: https://doi.org/10.2478/ceej-2024-0023
Parole chiave
© 2024 Artur Hołda et al., published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.
Figure 1.
Characteristics of R&D tax relief
| low level of analysis of the presented data | 6 | 25% | |
| average level of analysis of the presented data | 8 | 33% | |
| high level of analysis of the presented data | 10 | 42% | |
| obligation to conduct R&D works and their commercialization | 13 | 54% | three countries easing this requirement |
| preliminary acceptance of works by external institutions | 7 | 29% | |
| Funding for RD works work | 24 | 100% | |
| Availability of other tax incentives for applying R&D work | 22 | 92% |
Recognition of costs included as production costs and elimination of intangible assets’ costs of production on their own
|
materials and services used to produce the component, benefits for employees related to production, fees for registration of legal title, depreciation of patents and licenses used in production. |
sales costs, administration costs, general plant costs, costs resulting from lack of efficiency and initial operating losses incurred before achieving planned efficiency, expenditure incurred to train employees to operate the component. |
General materiality criteria according to ACCA
| 1–2 % | 0.5–1.0% | 5% | 5–10% |
Summary of observations of conducted research
| H1 | knowledge of balance sheet law | junior accountant | ||||||||
| senior accountant | ||||||||||
| chief accountant | ||||||||||
| management of the entity (management board, supervisory board) | ||||||||||
| H2 | knowledge of tax law provisions | junior accountant | ||||||||
| senior accountant | ||||||||||
| chief accountant | ||||||||||
| management of the entity (management board, supervisory board) | ||||||||||
| H3 | the need to create a new accounting standard for R&D works | services | ||||||||
| trade | ||||||||||
| production | ||||||||||
| other | ||||||||||
| H4 | tax inspection | Yes | 7.41 | 1 | 0.006 | confirmed | 0.568 | |||
| No | ||||||||||
| H5 | expenses questioned | Yes | 2.07 | 1 | 0.150 | rejected | ||||
| No | ||||||||||
| H6 | distortion of the financial statements | Yes | 0.873 | 1 | 0.350 | rejected | ||||
| No |
Descriptive statistics by R&D beneficiaries
| Q1 | Sector | services | 15 | 46.9 % |
| production | 5 | 15.6 % | ||
| trade | 6 | 18.8 % | ||
| other | 6 | 18.8 % | ||
| Q2 | Experience | 0–1y | 12 | 37.5 % |
| 1–4y | 9 | 28.1 % | ||
| 4–7y | 2 | 6.3 % | ||
| up to 7y | 9 | 28.1 % | ||
| Q3 | Position | Junior Accountant | 18 | 56.3 % |
| Senior Accountant | 6 | 18.8 % | ||
| Chief Accountant | 2 | 6.3 % | ||
| Managing Person | 6 | 18.8 % | ||
| Q4 | Relief in Past | No | 24 | 75.0 % |
| Yes | 8 | 25.0 % | ||
| Q5 | Since Relief | from 2020 | 1 | 12.5 % |
| from 2021 | 2 | 25.0 % | ||
| from 2022 | 2 | 25.0 % | ||
| earlier than 2020 | 3 | 37.5 % | ||
| Q6 | Economic Benefits | No | 5 | 15.6 % |
| Yes | 6 | 18.8 % | ||
| No opinion | 21 | 65.6 % | ||
| Q7 | Record | small extent | 19 | 59.4 % |
| enough | 3 | 9.4 % | ||
| good | 6 | 18.8 % | ||
| very well | 4 | 12.5 % | ||
| Q8 | Provisions of the Balance Sheet Law | Yes | 5 | 15.6 % |
| No | 5 | 15.6 % | ||
| difficult to determine | 22 | 68.8 % | ||
| Q9 | Standard | No | 12 | 37.5 % |
| Yes | 20 | 62.5 % | ||
| Q10 | Tax Law Provisions | Yes | 8 | 25.0% |
| No | 14 | 43.8% | ||
| difficult to determine | 10 | 31.3% | ||
| Q11 | Tax Inspection | No | 16 | 69.6 % |
| Yes | 7 | 30.4 % | ||
| Q12 | Claim Expenses | No | 18 | 81.8 % |
| Yes | 4 | 18.2 % | ||
| Q13 | Incorrect Expenses | No | 17 | 81.0 % |
| Yes | 4 | 19.0 % | ||
| Q14 | Tax Relief | No | 14 | 66.7 % |
| Yes | 7 | 33.3 % | ||
| Q15 | Manipulation of Financial Results | No | 16 | 80.0 % |
| Yes | 4 | 20.0 % | ||
| Q16 | Making a Correction | No | 11 | 84.6 % |
| Yes | 2 | 15.4 % | ||
| Q17 | Financial Statements Distortion | No | 12 | 70.6 % |
| Yes | 5 | 29.4 % | ||
| Q18 | Creative Accounting | No | 11 | 34.4 % |
| Yes | 21 | 65.6 % |
Comparison of the provisions contained in the Accounting Act and IAS regarding RD works works
| item | cost of completed development work | cost of research work, cost of development work |
| method of recognizing expenditure on research work | no regulation – in accordance with Art. 10 section 3 of the Accounting Act possible reference to IAS | costs of a given period |
| method of recognizing expenditure on development works | activated as active accruals | costs of the period when they do not meet the definition of assets or are capitalized in intangible assets |
Research questions and hypotheses
| H1 | Q1 | 3 and 8 |
| H2 | Q2 | 3 and 10 |
| H3 | Q3 | 1 and 9 |
| H4 | Q4 | 4 and 11 |
| H5 | Q5 | 4 and 12 |
| H6 | Q6 | 14 and 17 |
Characteristics of RD works
|
they strive to acquire new knowledge, searching, assessing and selecting ways to use research work, searching for alternative materials, products, processes, formulation, design and final evaluation of the results of discovery work. |
design, construction and testing of experimental models before implementation into production, designing tools, devices and moulds using new technology, design, construction and operation of a trial line, the size of which does not enable economic production intended for sale, designing or testing selected solutions in the field of new or improved products, processes, materials. |