New accounting standards, namely SFAS 141 and 142, were adopted in 2001. The release of these two regulations offers a unique opportunity to explore how managers have changed their earnings manipulation behaviour by using In-process Research and Development (IPRD) costs. In this study, we examine whether and how the amount of IPRD at the acquisition deals is associated with discretionary accruals, which serve as a proxy for earnings management. We use a sample of firms reporting acquired IPRD over the period 1993-2007 with a matched group based on size and industry. Our results provide evidence that managers strategically use the IPRD costs as an income-decreasing earnings management tool, and SFAS 141 and 142 effectively reduced the use of IPRD costs to manipulate earnings. Furthermore, we examine the effect of SFAS 141R, which was adopted in 2008, on earnings management by using IPRD. We use a sample of firms reporting acquired IPRD at the firm level over the period 1993-2011 with a matched group based on size and industry. Results indicate that IPRD is no longer related to income-decreasing earnings management after the adoption of SFAS 141R. These findings can help accounting regulators determine how to curb the misleading use of IPRD for earnings management purposes.