Accounting For Intangible Assets Research Articles

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.

Accounting and tax accounting of intangible assets

Accounting and tax accounting of intangible assets

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

СПЕЦИФИКА ОЦЕНКИ ЧЕЛОВЕЧЕСКОГО КАПИТАЛА

The economic and technological development of modern society is directly related to the quantity and quality of human capital in the structure of the national wealth of countries. His assessment is becoming an increasingly relevant area of scientific knowledge. The desire of states to build or strengthen a "new economy" is noticeable, which increases the need for technological breakthroughs that are associated with the study of human capital. The study of the specifics of human capital and its description will make it possible to more effectively plan and control the conduct of theoretical and empirical research. The article describes the distinctive features of human capital from other types of capital. Within the framework of theoretical research, the author's classification of the specifics of human capital assessment has been formed, which consists of three main characteristics. This specificity has been theoretically confirmed on the basis of foreign and domestic studies. Taking into account the identified specifics when conducting theoretical and empirical research in the field of human evaluation will help reduce the error of measurement results and their interpretation. The theoretical and methodological basis of the research consists of: theories of human capital, related theories of labor economics, the history of managerial thought. The study used a set of theoretical methods, such as comparative analysis, synthesis, induction and deduction. The research is based on both classical works of domestic and foreign scientists, as well as modern developments of practitioners and theorists, international standards, World Bank statistics and specialized literature in the field of human capital theory and accounting of intangible assets.

TO THE QUESTION OF REFINING THE ACCOUNTING CLASSIFICATION OF INTANGIBLE ASSETS OF SCIENTIFIC ENTERPRISES

The modern development of the economic system of our state requires the use of new scientific knowledge and innovations. The scientific sphere is a small segment of the economy in our country, as of 2020 the share of this industry in Ukraine’s GDP was only 3.04% and is much lower than this figure in Germany (6.24%), Spain (4.68%) ), Poland (5.92%) and France (8.44%). Science-intensive enterprises and intangible assets are interrelated, as the production capacity of enterprises in this industry depends on the availability of intellectual property rights. However, intangible assets are underestimated in the activities of Ukrainian science-intensive enterprises, and therefore today professional, scientific and technical activities (industry M) in the country is experiencing a crisis, which reduces the prestige of scientific work. The article considers the issues of approaches to the classification of intangible assets for accounting purposes. The main documents governing the accounting of intangible assets in our country are highlighted. Different approaches to the essence of intangible assets in scientific and regulatory sources are analyzed. It was found that intangible assets are one of the least studied categories in accounting. The share of the scientific sphere in GDP has been studied. The structure of investments in intangible assets of Ukrainian enterprises is analyzed. The importance of expenses for professional training, retraining and advanced training for innovative enterprises of the “M” branch is established. As a result, we concluded that the issue of classification of intangible assets remains unresolved, and therefore is relevant, and provided recommendations for improving the accounting and analytical management of knowledge-intensive enterprises.

Discussion of ‘Accounting for intangible assets: suggested solutions’

Discussion of ‘Accounting for intangible assets: suggested solutions’

Problems of documenting the accounting of intangible assets

The situation related to the primary documents and the structure of their forms for accounting for intangible assets needs to be resolved. The existence of a number of options for the use of forms of primary documents for accounting for intangible assets, which complicates the documentation process, as the primary forms are partially collected and regulated by several laws and regulations. The need to streamline and summarize the primary documents for accounting for intangible assets and goodwill is emphasized, the order of which should be regulated by a single document. It is recommended to implement the Guidelines for the use of forms of primary accounting of intangible assets and goodwill, with a set of relevant details, which should include documents that will reflect all groups of intangible assets, not just those related to intellectual property. Emphasis was placed on the need to develop primary documentation that will reflect the operations with the formation of intangible assets that will create internal goodwill. It is noted that the use of uniform, agreed forms of primary accounting of intangible assets is also necessary to improve the quality of inspections by regulatory authorities. Primary accounting forms for inventory of intangible assets № IA-4 «Inventory description of intellectual property rights (PR)» and № IA-5 «Inventory description of objects of the right to use natural resources, property and other intangible assets» are developed and recommended to use. It is substantiated to make clarifications and introduce additional details to the inventory descriptions, which is necessary to improve the quality of information formation during the inventory. Emphasis is placed on the need to disclose in the process of inventory objective information about intellectual property objects by checking them for functional compliance, to record the working condition of such objects.

ОЦІНКА НЕМАТЕРІАЛЬНИХ АКТИВІВ В ОЦІНЦІ ВАРТОСТІ БІЗНЕСУ: РОЛЬ, КЛАСИФІКАЦІЯ, МЕТОДИ

The article notes the essence of “business” and “company” as well as their aim for investment and decision-making purposes. It also defines the essence and objectives of business evaluation as well as importance of the valuation of the business for their confident activity. The need of standardization of evaluation process was mentioned. The aim of business valuation is mentioned considering targeted environment. The functions of business evaluation are considered and their brief description is given. The factors that need to be used when evaluating a business are listed. The characteristic of fair value of business was noted and the basic methods used for its estimation in world practice is considered according to their classification. The issue of intangible assets valuation today is very controversial, but as the same time the importance of intangible assets and their role in assessing the value of business grows every year, and it was considered in the article. The process of estimation of intangible assets in explained due to some characteristics according to the article and the procedure for accounting of intangible assets in accordance with International Accounting Standards is determined as well as the procedure of fair value estimation of both internal generated and purchased intangible assets. There were also indicated concepts of revaluation and impairment of intangible assets due to the correct estimation of their useful life and economic utility. Also in the article was mentioned when the amortization of the intangible asset should begin. The methods of intangible assets valuation were determined and details for each method were characterized as well. The intangible assets were indicated due to the ability to identify them. The concept of goodwill associated with unidentifiable intangible assets, its accounting in accordance with international accounting standards and the importance of its evaluation to determine the fair value of the business. But the area of goodwill which cannot be detected based on International Financial Reporting Standards is still pourly researched. According to this issue, recommendations for further research of this specific area were given.

Features of regulation of accounting of intangible assets in research institutions

The normative regulation and problems of accounting of intangible assets in scientific institutions are considered. It is noted the introduction of modern accounting regulation in budgetary institutions only in 2015, which led to differences in the accounting of NA in scientific institutions. The practice of accounting for intangible assets (IA) in budgetary institutions indicates the need to improve regulations. The purpose of the article is to consider the example of scientific institutions of the NAS of Ukraine regulatory regulation of accounting for intangible assets and issues of its improvement. It is emphasized that the accounting of NA in scientific institutions is essential for the commercialization of intellectual property rights, while the main difficulties in the introduction of accounting for intangible assets for scientific institutions were associated with the lack of modern budget regulations for accounting. The main stages of implementation of accounting of intangible assets in scientific institutions are given. It is important to amend the Methodological Recommendations on Accounting of NA and NPBO 122 regarding the definition of the concept of «use» of intangible assets, as well as the costs to be taken into account when determining the value of NA created in the institution. The issue of accounting for research and development reports is problematic. The terminology used in the regulations also needs to be clarified. Key words: intangible assets, valuation of IP, research institutions, accounting.

Did SFAS 141/142 improve the market’s understanding of net assets, goodwill, or other intangible assets?

Statement of Financial Accounting Standards nos. 141 and 142 eliminated the pooling method of accounting for acquisitions and altered the accounting for intangible assets, respectively. The Financial Accounting Standards Board (FASB) asserts that as a result of these changes financial statement users (i.e., market participants) will be “better able to understand the investments” made and have an improved “ability to assess the future profitability and cash flows” derived from these assets. In this paper, we address whether the FASB accomplished its goals with these new standards. We utilize an OLS regression to assess investors’ ability to forecast a firms’ future performance and to determine whether the information related to these accounting changes are impounded into market prices. The overall evidence partially supports FASB’s assertion of providing better information. While there is a significant improvement in market participants’ ability to assess the future economic benefits associated with goodwill, there does not appear to be any improvement in the market’s ability to understand the future implications of other intangible assets or net assets in general.

Certain aspects of methodology for accounting of intangible assets

Introduction. In today’s competitive environment; there is an urgent need to find new approaches to managing an enterprise and its intangible assets in order to ensure the stability and development of domestic enterprises. For effective management of the enterprise; there is a need to conduct research aimed at improving the accounting methodology in accordance with the present requirements and to increase the formation of quality information and accounting support of the management system; etc.Objective. The study is aimed at studying such elements of the accounting method as double-entry; the balance sheet; reporting by disclosing their nature; determining the impact on accounting and the formation of reporting indicators in the IAs and goodwill in accordance with the requirements of the applicable law.Methods. Analysis and synthesis are used to identify the current state of the study of the elements of the accounting method. Scientific abstraction and historical methods have been used to outline the problems investigated by scientists arising in the theoretical and practical area of accounting for IAs. Groupings; tables; graphs are used to classify IAs and goodwill and to establish the interconnection of the accounting method elements; etc.Results. The problems of accounting and reporting of intangible assets through the prism of such elements of accounting method as accounts; double-entry; the balance sheet; reporting are revealed. It is emphasized that the balance sheet as an element of the method should be understood not only as a form of reporting but first and foremost as a model for ordering accounting objects and summarizing information on the facts about the economic activity. Not all intangible assets are reflected in the accounts and respectively in the balance sheets of domestic enterprises. This applies both to recognized intangible assets under PAS 8 and internally generated assets that do not meet the recognition criteria but which increase the value of the enterprise.It is stated that the internal goodwill should be reflected in the financial and management accounting of the enterprise because of its existence during all current activities of the company; and not only at the moment of its realization. Keeping current records of goodwill at the enterprise will reduce the gap between its market and book value to a minimum.The impossibility of simultaneous attribution of intangible assets transactions to two types of activities; which is disclosed in the financial statements; is proved. It is noted in the Statement of Cash Flows that the information on the sale of intangible assets should be recorded as an operating activity. The revision of the definition of «investment activity» was emphasized.Prospects. It is necessary to conduct research in the field of improving the methodology of domestic accounting in general; including intangible assets through the study of approaches to the accounting methodology.

Current state and trends of development of organizational and methodical support of intangible asset accounting

The article identifies contemporary problematic aspects of information management of intangible assets at the enterprise. Today there is an urgent problem that most of intangible assets are not reflected in the reporting of the enterprise, and this, in turn, significantly distorts the information used by users in making important managerial and strategic decisions, so it is necessary to find ways to solve problems of identification and valuation of intangible assets at the enterprise. Undoubtedly, one of the most important stages of management of intangible assets of the enterprise is the process of forming indicators of reporting and making important decisions on its basis. The reporting generates an opinion of potential investors about the intangible assets owned and managed by the enterprise, which may indicate a much lower level of investment risks and greater willingness of investors to invest their resources in the activities of an entity. Therefore, the improvement of organizational and methodological approaches to accounting for intangible assets at the enterprise, and ultimately the development of forms of internal reports on intangible assets as a modern tool for managing such assets, will help to meet the demand for information of current and potential investors, retention and attraction of new assets, necessary for business and its development.

Federal accounting standard for public finance “Intangible assets”: compliance with current legislation and IFRS OS

Starting from January 1, 2021, the Federal accounting standard for public finances “Intangible assets” is being introduced. The article focuses on the use of new approaches by public sector organizations to organize accounting (budget) accounting of intangible assets, as well as their correlation with the requirements of current legislation and the international public sector financial reporting standard IFRS OS 31 “Intangible assets”.

Problems of accounting and reporting of intangible assets through accounting methods

Introduction. Constant changes in the economy require the development of a system of accounting, which requires constant improvement of its methodology. Nowadays, the companies’ value growth is due to the increase in the share of intangible assets. Therefore, it is relevant to conduct research that will highlight the problems of accounting and reporting of such assets of the enterprise through the accounting methods and outline ways to solve them. Objective. The paper aims at studying the methods of accounting, disclosure of their nature, determining the impact on accounting and the formation of reporting indicators in the IAs and goodwill in accordance with the requirements of the applicable law. Methods. The research methodology is based on the study of the state of the statutory regulation of accounting of intangible assets through a critical analysis of the content of normative documents. The identification of problematic issues was determined through a quick survey and questionnaire of the chief accountants of the companies’chief accountants. Methods of comparison and grouping were used at all stages of the study, and the results were summarized at the final stage.Results. It is stated that the it is necessary to consider all methods that contribute to the accounting development but not only the specific ones. A simulation method will allow to build accounting models to represent and use elements of the method of accounting in current accounting, educational and scientific processes, as well as well as to fulfil plans and set accounting estimates. The necessity of development of new methodological recommendations for documentary provision of primary accounting of intangible assets of all types with generalization and improvement of existing forms of primary documents is substantiated. It is substantiated that the inventory should take into account the characteristics and nature of certain types of intangible assets to determine the approach to verification. The necessity of choosing a prudent approach to the revaluation of intangible assets at fair value and the appropriateness of the cost model in many cases is disclosed. The necessity of elaboration of Methodological recommendations for the formation of the cost of intangible assets in the context of calculation items for enterprises of different types of economic activity, or more detailed disclosure of this issue in PAS 8, is revealed. Prospects. It is necessary to carry out research in the field of improvement of accounting methodology, including intangible assets through the prism of such elements of the method of accounting as accounts, double-entry, and balance sheet.

НЕМАТЕРИАЛЬНЫЕ АКТИВЫ ОРГАНИЗАЦИИ В УСЛОВИЯХ АВТОМАТИЗАЦИИ УЧЕТНОГО ПРОЦЕССА

In this article, the author investigated the requirements of domestic regulations and legal acts, the provisions of international financial reporting standards (IFRS) regarding the reflection in accounting of intangible assets, as well as the content of the draft Federal Accounting Standard (FSBU) «Intangible Assets» in order to identify their similar and distinctive characteristics. Based on the results of the study, a definition of intangible assets was formulated, taking into account the legal and economic aspects of this category, in addition, a system of sub-accounts to the account 04 «Intangible Assets» was recommended, taking into account the requirements of the project FSBU «Intangible Assets», examples of using these sub-accounts in an automated accounting environment are given.

Distinctive features of national and international accounting for intangible assets

This article highlights the differences and similarities in the bookkeeping of intangible assets according to national and international accounting standards on an analytical basis. In accordance with IAS No.38, intangible assets include computer software, patents, copyright, cartoons, customer lists, mortgages, fishing licenses, airport landing rights, production quotas, music and film publishing, rights of ownership, customer and supplier relationships, customer loyalty, market share of the business entity, title names(titles), publishing names and business development costs, franchising, copyright, derived formulas and brands.