2023 Volume 35 Issue 2 Pages 187-207
In this study I examine the influence of a company’s financial resources on the relationship between development costs that are capitalized according to IAS 38 and future performance. Specifically, I analyze the influence of a company’s financial resources on the relationship between development assets and the level of future profit margins / the uncertainty of future profit margins. In addition, I also examine the influence of financial resources on the relationship between R&D expenses and future performance. I focuses on Japanese companies adopting IFRS belong to the manufacturing industry. I can’t find that a company’s financial resources has an influence on the relationship between development assets and the level of future performance. However, on the other hand, I find that a company’s financial resources has a favorable influence on the relationship between development assets and uncertainty of future performance. No significant results were shown regarding the influence of financial resources on the relationship between R&D expenses and future performance.
