The Impact of Capitalizing R&D Expenditure on the Execution of Enterprise Innovation Strategy Management

Yuhong Hao

doi:10.54691/241zsa12

Authors

Yuhong Hao

DOI:

https://doi.org/10.54691/241zsa12

Keywords:

R&D Expenditure Capitalization, Innovation Strategy, Strategy Management, Enterprise R&D.

Abstract

With the in-depth implementation of the innovation-driven development strategy and intensifying market competition, enterprises are paying increasing attention to R&D activities, and R&D investment has become an important indicator for measuring innovation capability and development potential. As a key accounting treatment method, the capitalization of R&D expenditure has a distinctly dual effect on the execution of enterprise innovation strategy management. On the one hand, it can optimize corporate financial statements, enhance financing capacity in the capital market, encourage sustained R&D investment, and provide accurate accounting information to support resource allocation for innovation strategies, thus promoting effective implementation. On the other hand, its application may lead to increased financial risks, short-termism in innovation strategy execution, and difficulties in information disclosure and regulation, posing challenges to the long-term advancement of innovation strategies. This paper systematically analyzes the positive and negative impacts of R&D expenditure capitalization on the execution of innovation strategy management and proposes recommendations such as improving financial management systems, rationally planning R&D investment, and strengthening external support to help enterprises achieve sustainable, innovation-driven development.

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