ACCOUNTING FOR INTERNALLY DEVELOPED SOFTWARE COSTS: A POSITIVE APPROACH.
Item
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Title
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ACCOUNTING FOR INTERNALLY DEVELOPED SOFTWARE COSTS: A POSITIVE APPROACH.
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Identifier
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AAI8515638
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identifier
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8515638
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Creator
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KANDIEL, EL-SAYED HUSSEIN AHMED.
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Contributor
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Victor Pastena | Martin Benis
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Date
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1985
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Language
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English
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Publisher
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City University of New York.
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Subject
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Business Administration, Accounting
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Abstract
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This research employs the economic positive theory framework to analyze the managements' incentives to choose between capitalizing or expensing the costs of internally developed software. It was hypothesized that ownership control status, leverage, the existence of public debt in the firm's capital structure, and the existence of management compensation plan linked to the reported earnings are more likely to increase the probability that a firm will choose to capitalize the costs of internally developed software. The firm size, and the interest coverage ratio are predicted to have the opposite effect.;Data on the selected firm characteristics were collected from the Annual Reports and the Form 10-Ks for 205 firms (31 Capitalizers and 174 expensers) for 1983 or last available financial statements. A balanced samples were created by using the random sampling and the repetitive techniques. Both the univariate and the multivariate tests were performed on the original sample as well as the balanced samples.;As expected the size and the interest coverage ratio are negatively correlated with the capitalization while the ownership control status, the existence of public debt, and the existence of management compensation plan are negatively correlated with the expensing method. Size and the existence of the public debt are significant at conventional level of significance. The ownership control status is marginally significant.;The empirical results indicated that leverage, interest coverage ratio, and the existence of management compensation plan are not motivational factors.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
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Program
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Business Administration
