The aim of this paper is to explain Australian R&D capitalisation and voluntary disclosure. It is argued that the discretionary choices available to management in Australia with respect to the accounting for and the disclosure of R&D expenditure and activities can be explained by the reduction of information asymmetries and agency costs. The results confirm that three aspects of information asymmetry investigated, research intensity, the use of R&D financing arrangements and the percentage of subsidiaries not wholly owned, are important in explaining the discretionary capitalisation of R&D expenditure. Furthermore, research intensity, and the use of an R&D financing arrangements, are significant in explaining voluntary disclosure of R&D expenditure and activities. These results are robust to the inclusion of controls for other economic characteristics of the firm including, share issue, size, accounting performance, leverage, proprietary costs and tax status