Ertuğrul, Melik2024-05-192024-05-1920201303-54952717-7483https://search.trdizin.gov.tr/yayin/detay/427402https://hdl.handle.net/20.500.12713/4128The accounting treatment of R&D investments has been an open and contentious discussion as certainaccounting regimes eliminate capitalizing and require immediate expensing while capitalization of R&Dinvestments satisfying all necessary criteria is mandatory in IAS 38. By analysing a sample of listed firmson Borsa Istanbul over 2009-2018, we shed light on the impact of capitalized R&D investments on i)market values, and ii) the value relevance of book value of equity and earnings. We define the former(latter) as the direct (indirect) value relevance. By revealing a significantly positive association betweencapitalized R&D investments and market values, we conclude that capitalized R&D investments aredirectly value relevant. Furthermore, the value relevance of earnings (book value of equity) increases(remains unchanged) as capitalized R&D investments increase. These outcomes are consistent with ourexpectations and the outcome for earnings provides evidence for the indirect value relevance ofcapitalized R&D investments.eninfo:eu-repo/semantics/openAccessArticle1937781802427402