The Impact of Revised Recommended Accounting Practices on R&D Reporting by UK Firms

The R&D reporting practices of UK quoted companies are analysed and the impact of the introduction of a revised Statement of Standard Accounting Practices in 1989, SSAP13 (Revised), recommending separate R&D disclosure for companies meeting certain size thresholds, explored. Using hazard rate models the preferred results indicate that the hazard of a firm reporting its R&D in its annual accounts shows positive time dependence and that large firms, by sales, are more likely to announce than small firms. It is also found that the introduction of SSAP13 impacted considerably upon the extent of reporting by all firms (whatever their size) with an anticipation effect in 1988, and large positive impacts in 1989 and 1990. Post-1989 those firms that exceeded the size thresholds embodied in the new standard also had a higher hazard of reporting their R&D.