| Abstract: | Although the relevance of research and development to firm value has been extensively documented, some apparently contrary results were recently reported using Australian data. Godfrey and Koh (2001) reported that capitalised R&D costs do not seem to contain information relevant to the valuation of Australian companies. As the Godfrey and Koh study was designed to test the value-relevance of intangible assets in general, it is likely that the sample did not include sufficient research-intensive companies to test the relevance of R&D to firm value. This research note confirms results from other previous studies indicating that capitalised R&D is relevant to firm value. |
