We estimate the association of investments in R&D and in physical assets (CAPEX) with subsequent earnings variability. We estimate these relations in different time periods and across industries. We find that R&D contributes to subsequent earnings variability more than CAPEX only in relative R&D-intensive industries - industries in which R&D is relatively more intensive than physical capital. In physical assets-intensive industries, we do not find similar relations. The findings suggest that with respect to subsequent earnings variability, fundamental differences between investment information about R&D and CAPEX exist. However, they are mainly noticeable in firms that operate in relatively R&D-intensive industries. The evidence also suggests there was a shift in the relations between R&D and CAPEX over time. Our findings contribute to the debate on accounting for R&D expenditures. Copyright 2007 The Authors Journal compilation (c) 2007 Blackwell Publishing Ltd.
Normal coordinate analyses and vibrational assignments are presented for the dimethyl phosphate anion [(CH3O)2PO2-] and its deuteriomethyl [(CD3O)2PO2-] and carbon-13 [(13CH3O)2PO2-] derivatives in the gauche-gauche conformation. The dimethyl phosphate anion, which is the simplest model for the nucleic acid phosphodiester moiety, exhibits many of the spectral complexities of DNA and RNA and has previously resisted a complete and consistent vibrational analysis. In the present study we make use of new experimental data on the dimethyl phosphate isotopomers, including Raman depolarization measurements, to develop a consistent valence force field for normal modes of the C--O--P--O--C phosphodiester network and its hydrogenic substituents, as well as for stretching and bending modes of the O--P--O network of the anionic phosphodioxy group (PO2-). The force field established for dimethyl phosphate incorporates one significant nonbonded force constant, introduced from ab initio calculations, to account for interaction between the two ester C--O bonds. This study resolves previous problematic assignments for conformation-sensitive symmetric (in-phase) and asymmetric (out-of-phase) skeletal stretching modes of the ester linkages and demonstrates substantial anharmonicity in the hydrogen-stretching vibrations of the methyl substituents. New assignments are proposed for Raman bands of the phosphodioxy group, which may serve as potential indicators of structure and interaction of the DNA phosphates.
We examine the impact of new pension disclosures and subsequent full pension recognition under FRS 17 and IAS 19 in the United Kingdom and SFAS 158 in the United States on pension asset allocation. These standards require recognition of net pension surplus/deficit on the balance sheet and actuarial gains/ losses in other comprehensive income. Therefore, these standards introduce volatility into comprehensive income and balance sheets. We identify a disclosure period during which UK companies disclosed all the required data under FRS 17 in the notes without recognition. We also identify a full recognition period starting 1 year before until 1 year after the adoption of FRS 17/IAS 19 (UK) and SFAS 158 (US). We predict and find that UK companies, on average, shifted pension assets from equity to debt securities during both the disclosure and the full recognition periods. We also find that while before the adoption of SFAS 158 US companies maintained a stable allocation to equities and bonds, these companies, on average, shifted funds from equities to bonds around the adoption of SFAS 158. Crosssectional analysis shows that the shift away from equities is related to changes in funding levels, shorter investment horizons, increased financial leverage, and the expected impact of the new standards on shareholders' equity.
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