The Effect of Disclosure of R & D Expenditures and Improving the Information Value of Basic Accounting Data: Combined Earnings Per Share Model, Book Value of Earnings Per Share, and Operational Cash Flow

Aim and The main purpose of this research is investigation the effect of disclosure research and development expenditures on the improving information value of basic accounting data.   The method of this study is a descriptive-correlation study. The present study was carried out using the information of the companies listed in Tehran Stock Exchange in the 10-year period from 2006 to 2015 with a sample of 30 pharmaceutical companies selected by systematic exclusion method. Research data from existing databases and information software such as Rahavard.e Novin and financial statements of listed companies in Tehran Stock Exchange as well as internet sites such as www.tsetmc.ir. To test the hypotheses, multivariate regression and data panel method were used and the adjusted modification coefficients of the models were compared before and after entering the variable of research and development expenditures.   The results showed that, considering the probability of variables in the period before and after entering the variable of research and development expenditures, operating and operating cash flow variables at the 99% and 95% confidence levels are significant in the model, but the book value variable at the level 95% confidence is not significant in the model. As a result, there is no significant relationship between book value and stock price. But there is a meaningful relationship between operating costs and profit with stock prices. The coefficient of modification of the model before and after the entry of the variable of research and development expenditures indicates that the relationship between the variable of earnings and book value and the transaction costs with stock prices after the entry of the variable of research and development costs are not improved. Therefore, it can be claimed that the expenditures on research and development improving the value of information based on profit, book value and operational critique is ineffective. Therefore, the research hypothesis is not confirmed.   Given the economic conditions and market competitiveness, the lack of attention to research and development expenditures and the continuous improvement of products and the satisfaction of customers' needs and finally, their satisfaction, threatens their survival of activities. The two main products of research and development activities include science and technology and a systematic link between the two. Establishing such a connection within a reasonable time can be one of the key factors for the growth and development of companies.