Accounting For Intangible Assets Research Articles

Model for improving organizational and methodological aspects of management accounting of intangible assets and goodwill

Model for improving organizational and methodological aspects of management accounting of intangible assets and goodwill

ОСОБЕННОСТИ ПЕРЕХОДА НА ФЕДЕРАЛЬНЫЙ СТАНДАРТ БУХГАЛТЕРСКОГО УЧЕТА 14/2022

Starting with reporting for 2024, a new federal accounting standard becomes mandatory - FSBU 14/2022 “Intangible Assets”, which changes approaches to the recognition and accounting of intangible assets, as well as to determining the value of such assets. Until 01.01.2024, accounting for intangible assets and depreciation on them was conducted on the basis of Accounting Regulations 14/2007. The new standard does not apply, in particular, to trademarks created by the organization itself. This article discusses the need to make changes in accounting and tax accounting starting from 01/01/2024 in terms of intangible assets in accordance with FSBU 14/2022.

A Comprehensive Methodology for Assessing the Business Reputation of Industrial and Production Personnel

The currently existing Russian and other legislation, as well as special literature, do not contain a methodology for the formation of the business reputation of the organization’s personnel and as a result, there is no unambiguous perception of the business, professional qualities of personnel as an object of evaluation of the organization in the market system. Therefore, it is impossible to single out the share of the results of intellectual advantage in the goods and services produced. This confirms the requirements formulated in paragraph 4 of Accounting Regulation 14/2007 «Accounting for intangible assets», which states that the intellectual and business qualities of the organization’s personnel, their qualifications, and their ability to work are not included in the intangible assets (since they are inseparable from their carriers and cannot be used without them). Meanwhile, the interests of the leading economically developed countries of the world lie in the field of accelerated growth of knowledge acquisition and application of professional skills. This trend of development of economically developed countries forms the basis of competitiveness and efficiency of their work. It should be noted that in the world economy, there is insufficient theoretical elaboration and a special practical significance and relevance of the issue of assessing the business reputation of the personnel of an economic entity. The article presents a comprehensive methodology for evaluating the performance of industrial and production personnel (the standard-production methodology), which contributes to the formation of accounting and information support for the analysis of the activities of both structural divisions, responsibility centers, business segments and commercial organizations as a whole. The author’s standard-production methodology makes it possible to determine the business reputation of industrial and production personnel, which contradicts the official economic paradigm.

Income statement mismatching has not reduced the informativeness of earnings over time

AbstractResearch has concluded that there has been a decline in the informativeness of earnings over recent years. The reported decline has been attributed to an increasing mismatch of expenses to revenues due to the increasing expensing of investments in so‐called intangible assets to the income statement. That suggests a remedy is required and, with accounting standards boards now considering intangible asset accounting, the issue is particularly pertinent. However, his paper challenges the conclusions from the research by documenting that the mismatching adds information for pricing. It does so by distinguishing higher risk investment from that booked to the balance sheet, and the market prices it as such. Further, in a seeming contradiction, the mismatching enhances matching, and empirical tests confirm. Once mismatched expenses and matched earnings are separated, there is little indication of a decline in the information content of accounting over time.

ORGANIZING THE ACCOUNT OF INTANGIBLE ASSETS DURING THE TRANSITION TO THE DIGITAL ECONOMY

In this article, one of the new objects of accounting is the organization of accounting of intangible assets based on the requirements of international standards of financial financial reporting, and opinions are expressed on the methodology of their recognition and evaluation. Scientific and practical recommendations on improving the accounting of intangible assets are given.

Intangible assets: accounting policies

The article reveals the features of the formation of an accounting policy in terms of organizing accounting, recognition, control over the presence and movement, assessment, revaluation and depreciation of the value of intangible assets in accordance with FSBU 14/2022 «Intangible assets». The technical and methodological aspects of accounting of intangible assets are considered.

MODEL FOR IMPROVING THE METHODOLOGY AND ORGANIZATION OF THE ACCOUNTING OF INTANGIBLE ASSETS AND GOODWILL

Purpose. The aim of the article is the development of a model for improving the methodology and organization of accounting for intangible assets and goodwill in the accounting (financial) accounting system. Methodology of research. The theoretical basis of the research is the scientific works of domestic and foreign scientists on the problems of research in the areas of improving accounting, the formation of reporting indicators and the management of intangible assets and goodwill. The methodological basis of the research is general scientific methods (synthesis, analysis, abstraction, comparison, generalization, grouping, systematization) – when forming proposals for improving the used elements of the accounting method, for the formation of new knowledge about the intangible resources of the enterprise, Illustrative method is used for a schematic representation of the model of improvement of the methodology and organization of accounting of intangible assets and goodwill, abstract and logical method – for formulating research conclusions. Findings. A model for improving the methodological and organizational foundations of the concept of accounting (financial) accounting for intangible assets and goodwill is presented, covering the following areas: expanding the principles of accounting (financial) accounting; clarification of the concept of "intangible assets"; highlighting the main aspects of recognition of intangible assets; expansion of the intangible assets classification; improvement of the organizational foundations of the accounting policy through the separation of its constituent and structural elements in terms of accounting (financial) accounting; development of Methodological recommendations for the application of typical forms of primary accounting of intangible assets and goodwill; improvement of the approaches to the inventory of NMAs by dividing them into those for which a documentary check is sufficient and those that additionally require a check on the quality of functioning; unification of intangible assets objects and systematization of approaches and methods of their assessment according to international and domestic standards of assessment and accounting; improvement of synthetic and analytical accounting of intangible assets and goodwill; improvement of form No. 1 "Balance (Financial Statement), Management Report, form No. 5 "Notes to the annual financial statements" in the part of disclosure of information about intangible assets and goodwill; improvement of the amortization policy in terms of taking into account the features of various types of intangible assets for choosing a method of amortization using slow-down methods and developing an algorithm for establishing the feasibility of its accrual to some types of intangible assets; improvement of the content of the regulatory and legal framework regarding accounting operations of intangible assets and goodwill. Ways to improve the methodology and organization of accounting and the formation of financial reporting indicators in the part of intangible assets and goodwill are substantiated and proposed. Originality. The conceptual foundations of the model for improving the methodology and organization of accounting for intangible assets and goodwill in the accounting (financial) accounting system have been established and substantiated. This, unlike the existing approach, will systematically cover all the main and problematic aspects, the consideration of which will affect the objective reflection of intangible assets and goodwill in the accounting and financial statements of the enterprise for their effective use. Practical value. Implementation of the recommendations proposed in the publication on improving the methodology and organization of accounting for intangible assets and goodwill in the accounting (financial) accounting system will contribute to increasing the efficiency of their use and management. The results of the research found practical application at enterprises of Ukraine. Key words: intangible assets, goodwill, accounting, accounting policy, classification, documentation, valuation, inventory, depreciation, financial reporting.

Goodwill as an accounting and analytical category ensuring evaluation and management of corporate reputation

Introduction. The efficiency of enterprises relies on the accurate assessment and accounting representation of their assets. In the context of the modern society, significant attention is devoted to intangible resources, particularly goodwill, as a key element of corporate reputation. However, the existing accounting-analytical system requires modernization to encompass all aspects of value creation. Goodwill issues captivate the interest of accountants, financiers, and managers, as this unique asset allows companies to gain a competitive edge in their respective industries. Objective. The purpose of the work is to study ways to improve the efficiency and accuracy of accounting for intangible assets, which will allow enterprises to provide reliable financial reporting and take into account important components of goodwill in the internal and external environment; studying the role of goodwill in assessing the value of a business on an ongoing basis; search for ways to improve the accounting and analytical support for the assessment and management of the business reputation of the enterprise, specific changes in the plan of accounts are proposed to improve the accounting of intangible assets, in particular elements of goodwill. Method (methodology). Scientific methods and approaches were used in the work, in particular, a comparison to study the main provisions of IFRS and NP(S)BO, analysis of the difference in approaches to accounting for goodwill and intangible assets between these standards; formalization and generalization of the main technological tasks of the organization of accounting of intangible assets for the implementation of the principles of goodwill in the system of ensuring continuity of activity and maintaining a positive business reputation of the enterprise. Results. In the course of the study, an in-depth analysis of the existing methods of goodwill assessment was carried out and their limitations in taking into account all components of this important category of assets were revealed. In response to this limitation, we have developed our own method that takes into account intangible assets that are not reflected on the company's balance sheet. The proposed methodology calculates goodwill as the difference between the fair value of net assets and their book value, considering revalued asset values and off-balance-sheet intangible assets such as business relationships, peculiarities of activity, and personnel knowledge. A supplementary recommendation includes modifying the Chart of Accounts to account for intangible assets, detailing them at an analytical level. These changes can identify and reflect important goodwill elements previously unaccounted for in financial reporting. The outlined modifications address the need for meticulous intangible asset accounting and contribute to increased reliability of financial reporting, essential for informed managerial decisions and establishing trust among stakeholders.

ORGANIZATION OF MANAGEMENT ACCOUNTING OF INTANGIBLE ASSETS OF THE ENTERPRISE IN THE INFORMATION SOCIETY

The theoretical features of rational organization of management accounting of intangible assets at the enterprise are considered. It is proved that the effective organization of management accounting of intangible assets is realized based on the optimization of the flow of accounting documents. This requires a change in the element of accounting methods. Thus, the study suggests ways to improve the accounting of intangible assets in the enterprise. The ways to optimize the movement of accounting documents for intangible assets are identified. The flow diagram of primary accounting documents between divisions of the enterprise on operations of intangible assets on the basis of the concept of "responsibility centers" and cost pool system is constructed. The movement flow chart of the certificate of the introduction of the intellectual property into economic turnover as a part of intangible assets is presented. It is the rational orderly movement of accounting documents and the implementation of various procedures that affects the effective management system of all resources of the economic entity. Thus, all the developed documents, namely: movement flow charts and accounting records flow diagrams, allow optimizing the accounting process for intangible assets. Their use in the enterprise allows clearly tracing the stages of the document and tracking possible deviations, for the further analysis and elimination of them. To assess the entity’s fair value of intangible assets for management accounting purposes, it has been proposed to establish the fair value intangible asset assessment certificate. To increase the relevance and eliminate the asymmetry of accounting information, managers monitor the use of fixed capital in order to make effective decisions about the development of the company.

Intangible asset accounting outlook: Valuation and reporting

Subject. This article discusses the issues related to the regulation of the valuation of intangible assets and reflection of information about them in reporting. Objectives. The article aims to identify the prospects for solving the problematic aspects of the intangible assets valuation and reflection in reporting. Methods. For the study, I used a critical analysis, synthesis, comparison, observation, and the analogy approach. Results. The article identifies problematic aspects of intangible assets valuation and information disclosure in reporting. It presents the results of a study of new approaches to the intangible assets valuation and reporting information reflection in FSBU 14/2022 – Intangible Assets Standard, and in the FSBU Projects – Intangible Assets, developed by the Ministry of Finance of the Russian Federation and the National Non-Governmental Accounting Regulator "Accounting Methodological Center" (NRBU BMTs Fund). Conclusions and Relevance. FSBU 14/2022 – Intangible Assets Standard and the Ministry of Finance of the Russian Federation and the NRBU BMTs Fund's Projects contain regulations on the initial and subsequent measurements of intangible assets, their useful life, amortization methods, reflection of information in reporting, which differ from the rules of PBU 14/2007 – Accounting for Intangible Assets. Each of the Projects under consideration has both advantages and disadvantages with regard to the intangible assets valuation and reflection in reporting. The FSBU 14/2022 regulations are similar to those ones presented in the FSBU Project, developed by the Ministry of Finance of Russia. The adoption of FSBU 14/2022 is a step forward with regard to the regulation of intangible assets valuation and reporting compared to PBU 14/2007. The results obtained have both practical and theoretical areas of application in the field of financial accounting.

Dynamics of normative regulation of accounting for intangible assets: from the discussed Draft to the adopted FSBU

According to the Order of the Ministry of Finance of Russia dated May 30, 2022 No. 86n, a new accounting standard FSBU 14/2022 “Intangible Assets” was adopted. Like any other entity, healthcare entities will need to apply the rules in this Standard to account for their intangible assets. The adoption of FSBU 14/2022 “Intangible Assets” was preceded by a rather lengthy discussion of the Projects of this FSBU, in particular the FSBU Project “Intangible Assets”, developed by the Accounting Development Fund “National Non-State Accounting Regulator “Accounting Methodological Center” (Foundation “NRBU “BMC”). In order to study the dynamics of changes in accounting regulations, it is of interest to compare the approaches to accounting for intangible assets proposed in the FSBU Project “Intangible Assets” and included in the approved FSBU “Intangible Assets”. It is also important to assess the differences between the adopted standard and its Draft. These differences indicate a general trend in the development of regulatory regulation of accounting objects on the example of regulations for accounting for intangible assets. At the heart of the Russian Accounting Reform Program (during the implementation of which new Russian FSBs are adopted) is the focus on bringing the rules for accounting for objects in the FSB with the regulations of International Financial Reporting Standards (IFRS). In this regard, it is important to study the question of the extent to which the adopted FSBU “Intangible Assets” brings the accounting of intangible assets closer to the regulations of IAS 38 “Intangible Assets” in comparison with such convergence with this international standard of regulations of the FSBU Project “Intangible Assets”. The results of such a study will complement the general characterization of the direction of the development of regulatory accounting for Russian organizations. The research methods were comparison, analysis, synthesis, grouping method, systemic and logical approaches. As a result of the study, the article revealed that the adopted FSBU 14/2022 included many of the regulations for accounting for intangible assets presented in the FSBU Draft. At the same time, it is shown that there are regulations that distinguish FSBU 14/2022 from the discussed FSBU Draft. The high degree of convergence of the FSBU 14/2022 regulations with the IAS 38 regulations is substantiated, while maintaining a number of significant differences between Russian and international standards.

Accounting for the recognition of intangible assets and the results of their valuation and revaluation

Subject. This article deals with the issues of valuation and accounting of intangible assets. Objectives. The article aims to disclose the organizational, methodological, and technical aspects of accounting for intangible assets and develop methodological recommendations for accounting for the results of revaluation of the value of intangible assets in accounts of organizations. Methods. For the study, we used analysis and synthesis, modeling, abstraction, etc. Results. The article reveals the organizational and methodological aspects of accounting for the recognition of intangible assets, the results of their valuation and revaluation, and it substantiates the methods and technical aspects of reflecting operations based on the results of revaluation of intangible assets in accounts. Conclusions and Relevance. To ensure the objectivity and reliability of intangible asset accounting data, federal and international accounting standards should be followed, and intangible assets should be clearly classified for accounting purposes into homogeneous groups. The results of the article can be applied both in the theory and practice of financial accounting.

Federal Accounting Standard 14/2022 Intangible Assets:Basic Provisions

The article is devoted to the new Federal Accounting Standard 14/2022 “Intangible Assets”, the use of which will be mandatory for private sector organizations, including medical organizations that own intangible assets, starting with the financial statements for 2024. The innovations that will occur in the accounting of intangible assets according to the adopted standard are considered — this concerns, first of all, the modification of the criteria for accepting this type of assets for accounting and the peculiarities of determining the amount of depreciation deductions, the emergence of a new concept of “liquidation value”, changing the content of depreciation methods. The features of accounting for intangible assets in accordance with Federal Accounting Standard 14/2022 were considered, starting from its recognition, subsequent valuation, depreciation and ending with its write-off from the accounting of the organization.

Directions for further development of accounting for intangible assets

Intangible assets occupy an increasingly significant place in the activities of organizations of various forms of ownership and various industries (including healthcare). This sets the task of developing accounting regulations that would ensure the formation of complete and reliable information about intangible assets. Currently, the accounting of intangible assets of commercial organizations and non-profit organizations that do not belong to the public sector is regulated by PBU 14/2007 “Accounting for intangible assets”. At the same time, the adopted Program for the further reform of Russian accounting provides for the adoption of a new FSB “Intangible Assets” for commercial organizations and non-profit organizations that do not belong to the public sector. In order to implement this Program, the Accounting Development Fund “National Non-State Accounting Regulator “Accounting Methodological Center” (Foundation “NRBU “BMC”) developed and published for discussion the FSBU Draft “Intangible Assets”. The innovations of this Project are analyzed in this article. The Russian Accounting Standards Reform Program aims at further convergence of Russian Federal Accounting Standards (FSBU) with IFRS regulations. In this regard, it is of interest to study the degree of convergence of the regulations of the FSBU Project “Intangible Assets” with the regulations of IAS 38 “Intangible Assets”. The research methods were comparison, analysis, synthesis, grouping method, systemic and logical approaches. As a result of the study, the article identified and substantiated aspects of greater proximity of the regulations of the FSBU Project “Intangible Assets” to the regulations of IFRS (IAS) 38 in comparison with the regulations of PBU 14/2007, as well as such issues of accounting for intangible assets, for which the FSBU Project “Intangible Assets” differs from IAS 38.

Reflection of the life cycle of an intangible asset in the accounting of a budgetary institution of the agro-industrial complex

The development of accounting in the public sector of the agro-industrial complex has significantly affected the accounting of intangible assets. With the application of the Standard, the approach to accounting for intangible assets has changed, now it is based on the principles of IFRS, therefore, intangible assets themselves can be presented from a different point of view. The authors of the article attempt to consider intangible assets as a life cycle model, which has not yet been applied to the concept of intangible assets. The algorithm of managerial decision-making and accounting of intangible assets at each stage of its life cycle is also proposed.

Reflection of the life cycle of an intangible asset in the accounting of a budgetary institution of the agro-industrial complex

The development of accounting in the public sector of the agro-industrial complex has significantly affected the accounting of intangible assets. With the application of the Standard, the approach to accounting for intangible assets has changed, now it is based on the principles of IFRS, therefore, intangible assets themselves can be presented from a different point of view. The authors of the article attempt to consider intangible assets as a life cycle model, which has not yet been applied to the concept of intangible assets. The algorithm of managerial decision-making and accounting of intangible assets at each stage of its life cycle is also proposed.

CLASSIFICATION AND DEPRECIATION ASPECTS OF ACCOUNTING FOR INTANGIBLE ASSETS

У статті запропоновано розширити класифікацію нематеріальних активів для обліково-аналітичних потреб. Для потреб фінансового обліку рекомендовано такі класифікаційні ознаки, як результат переоцінки, наявність активного ринку, нематеріальний актив як інвентаризаційний об'єкт, належність до країни походження, відображення в балансі підприємства. Класифікацію нематеріальних активів підприємства для управлінського обліку й аналітичних потреб доповнено такими ознаками, як об'єкт обліку, потреба у захисті, вплив на стратегічний розвиток підприємства, здатність до відтворення. Розроблений алгоритм встановлення доцільності нарахування амортизації на нематеріальні активи на основі таких ідентифікаторів, як термін їх корисного використання, наявність в правовстановлюючому документі положення про продовження або поновлення, існування вигод, які очікує одержувати підприємство після продовження або поновлення контракту, відсутність суттєвих витрат і змін існування умов контракту. Застосування цього алгоритму дасть змогу ефективно управляти нематеріальним активом і приймати обгрунтовані рішення щодо їх амортизації, що сприятиме встановленню об'єктивної вартості цих активів та буде впливати на вартість підприємства.

Tax regulation of enterprise R&D expenditures: special aspects and problems of regulation

The subject of the research is a corporate income tax regime of tax accounting of intangible assets and R&D spending. The working hypothesis is that realization of the regulative potential of tax policy in relation to stimulating R&D activity and creation of intangibles assets shall be streamlined and adapted to increase the effectiveness of innovations. Authors suggest that the key tax policy goal of the mechanism is the widening of the volumes of commercialized R&D results and intangibles, lowering the tax risks, and increasing the legal certainty. The aim of this research is formulation of tax policy proposals for subsequent reforming this mechanism of direct taxation of transactions related with R&D.To achieve the aim of the research the following research approach was employed by the authors. As a first step authors present a literature review on the issue. As a second step authors are performing the analysis of current rules related to tax accounting of R&D costs and intangibles in accordance with Tax Code of Russian Federation. As a third step authors delineate the barriers and legal obstacles in the performance of tax incentives for R&D by reviewing the judicial cases and analytical reports on the issue. Finally, authors formulate their tax policy proposals for the subsequent tax reforms in relation to tax accounting of R&D.The results and the scope of the study. Author’s working hypothesis is based on the idea that the effective application of tax policy instruments can contribute to success of the jurisdiction in winning in global tax competition game. This is particularly important in context of digitalization and for attracting investments and parts of activities of multinational enterprises to the territory of the state. Intangible assets and key people which coordinate the processes of the creation of intangibles can be regarded as the crucial value-added factors in the modern economy where technological MNEs are increasingly dominating. Countries compete internationally for these talented people and favorable and certain tax regime can positively impact on MNE decisions to make a profit center in any jurisdiction, while tax uncertainty can negatively impact this decision.Conclusions. One of the key results of this research is that R&D tax incentives in Russia remain rather unpopular instrument in corporate practice. Authors explain this with the existing legal barriers and legal uncertainty. This uncertainty leads to tax risks for taxpayers which impacts their decisions for using the incentives. Review of judicial cases related to tax accounting of R&D costs when calculating corporate income tax base showed that there are many different areas of disputes between taxpayers and tax authorities. It is important to note that some of this uncertainty is already addressed in recent amendments to Article 262 of Tax Code. Authors propose to reduce uncertainty by extending the scope of R&D tax incentives to all types of R&D activity. The goal of the research is therefore can be considered as achieved.

The concept and essence of intangible assets as an economic category

Based on the generalization of approaches of domestic and foreign researchers, the article proposes the author’s interpretation of the essence and structure of the category «intangible assets», the novelty of which lies in a more complete accounting and involvement of the unidentifiable part in the economic activity of a commercial organization. The key differences of accounting and economic approaches to the definition and accounting of intangible assets were considered, a number of specific difficulties in the management of these assets were identified, the most important relationships that determine the new context of innovation development based on the use of the potential of available enterprise intangible assets were revealed.

CRITICAL ASSESSMENT OF THE CURRENT STATE OF ACCOUNTING AND AUDIT OF INTANGIBLE ASSETS AT ENTERPRISES

Expansion of the use of intangible assets, imperfection of the legal framework and classification of objects, insufficient development of valuation methods, necessitates the improvement of their accounting and auditing. Today, the problem of developing a scientifically sound classification of intangible assets is of particular importance, which is an important prerequisite for the rational organization of accounting for this object. A critical analysis of the composition of these groups in the classification of intangible assets in accordance with UAS 8, which is the basis of sub-accounts of account 12 "Intangible assets", shows the existence of a number of inaccuracies. An important problem that needs to be solved in the process of organizing the accounting of intangible assets is the choice of forms of primary documents. The lack of standard forms of primary documents developed for intangible assets, as an accounting group of enterprise assets, does not meet modern requirements, which today are increasingly involved in business. The article, based on the study of foreign experience in the use and reporting of intangible assets, as well as its comparison with domestic enterprises, identifies the main problems associated with the use and accounting of intangible assets, and offers recommendations for their solution. The above problems are present in almost every domestic enterprise and lead to violations of the accounting process, insufficient coverage in the reporting of information on intangible assets, inaccurate assessment. The lack of valuation methodology does not allow to unambiguously determine the place of this type of economic resources in the accounting process, to represent them in the public reporting of the enterprise, especially to include them in the balance sheet to balance market and book value. Today, one of the pressing issues is to establish the value and impact of intangible assets on the market value of the enterprise. There is a need for in-depth study of existing and disputed intangible assets, the factors that affect them, the establishment and development of approaches, methods in order to objectively assess the value of the enterprise. In order to eliminate and prevent errors in the accounting of intangible assets and ensure quality audit of intangible assets in the enterprise, the article conducted a study of information support audit of intangible assets. Also, one of the promising areas of accounting and auditing of intangible assets is their implementation in the use of computer technology. Thus, the analysis of the results of research of domestic and foreign economists shows that theoretical and practical developments in accounting and auditing of intangible assets are modern and require further research and development to improve and adapt to international standards