Quality of R&D Information in the Disclosures of Pharmaceutical Companies in Hungary

Abstract

The Hungarian Accounting Act and the International Financial Reporting Standards require different accounting treatments and disclosures for research and development activities. While examining ten years’ financial statements of five Hungarian pharmaceutical companies, we revealed the differences between the two accounting systems and evaluated the quality of the provided accounting information. Incorporating former researchers’ findings, the authors developed a criteria system for content analysis to examine the impact of accounting differences on the quality of accounting information. The financial statements presented on the IFRS basis provided more consistent high-quality information, while the disclosures prepared on the domestic accounting rules showed a variable picture.