Measurement Of Intangibles Research Articles

The Impact of Accounting Measurement on the Financial Reporting

This article provides an in-depth discussion of the impact of accounting measurement on financial reporting. After confirming the centrality of accounting measurement in financial reporting, the article analyses the impact of accounting measurement on corporate financial reporting in four accounting items: intangible assets, R&D, goodwill and pensions. The study points out that the assessment of enterprise value and stability can be significantly affected by improper measurement of intangible assets. Accurate R&D accounting measurement is essential for financial report users to reveal the true value and potential earnings of a business. Goodwill arises mainly from accounting for business combinations or mergers and acquisitions, and accurate measurement is an important basis for business risk assessment and strategic planning. Pension accounting measurement affects the prediction of future cash flows of enterprises, and therefore has an impact on the users of financial reports, especially on investors. This paper demonstrates, through five case studies, the use of accounting measures for the above four accounting subjects in actual financial reporting and their specific impact on decision makers. In conclusion, the accuracy of accounting measures plays an indispensable role in improving the transparency and comparability of financial reporting and can have a decisive impact on the decisions of investors and other stakeholders.

Spending on Intangibles and The Growth of Public Sector Enterprises In India: A Measure-Specific DEA Analysis

A recent surge of intangible investment to navigatethe productive capability of Central Public Sector Enterprises (CPSEs) resurrected a range of doubt about the trajectory of choices and the actual managerial space that actualizes these choices. Though spending on intangibles and more particularly on R&D contribute substantially to growth parameters but the ambiguous magnitude of spending patterns and treatment of such expenditure from regular business operation to an investment element, in particular, to enhance the valued capability, yet unresolved in the corporate world. Recent studies on the usefulness of intangibleoutlay and capitalization of the same in improving future returns evidenced a gloomy pattern of crisis in the measurement and allocation of intangibles. As evidenced, most of the spending on intangibles by the business units in India is targeted to secure “patent for profit” rather than to achieve “valued capability” to expand real opportunities to choose between alternatives. Based on the last ten years' dataset of Maharatna Enterprises this study critically examines the contribution of decisive one from the container of four inputs namely spending on software, other R&D expenditure, materials, and employee costs on a set of productive activities covering the revenue and net- value- added, as these are more regular in enhancing both profit and production capability with the help of input-oriented VRS weighted measure-specific DEA model. Results show that the multidimensional performances between the enterprises are not uniform throughout the study period and that the efficiency is highly correlated with the size of a few companies like ONGC, BHEL, and GALE and higher spending DMUs on intangibles do not necessarily have higher-ranked performance in terms of returns and net value added. This study provides valuable insights for managers aiming to maximize the benefit of variety in Software and other R&D spending patterns considering the sizes of the companies while minimizing the risk associated with excessive diversity beyond the moderate threshold in intangible investments.

Recognition and Measurement of Intangible Assets in the Technology Industry based on IFRS

Recognition and Measurement of Intangible Assets in the Technology Industry based on IFRS

PROSES PENGAKUAN DAN PENGUKURAN ASET TAK BERWUJUD DATA DAN INFORMASI GEOSPASIAL: KELEMAHAN DAN KENDALA

The purpose of this study is to analyze the implementation and constraints and provide recommendations in the process of recognition and measurement of intangible assets of basic geospatial data and information. This research uses a qualitative method through a case study at the Geospatial Information Agency. Data collection methods were conducted by document analysis, observation, and in-depth interviews with policy implementers and related management. The results showed that there are implementation weaknesses and obstacles in the process of recognizing and measuring intangible assets in the form of basic geospatial data and information. Weaknesses occurred in implementation including the budgeting process, budget execution, and reporting. Implementation weaknesses that occurred included the absence of involvement of the Government Internal Supervisory Apparatus in budget revisions, the absence of standardized submission forms, corrections in the reporting section that were not communicated to the budgeting and implementation sections, and capital expenditure returns that had not been integrated with the asset module. In addition, obstacles also occur, including communication factors, resources, dispositions, and bureaucratic structures that occur simultaneously with each other. This research provides recommendations for guideline revisions and practical mechanisms to properly implement the guidelines in the process of recognizing and measuring intangible assets in the form of basic geospatial data and information.

Subsequent measurement of intangible assets in FAS 14/2022: main innovations, problems and ways to solve them

From 2024, the Federal Accounting Standard (FAS) 14/2022 “Intangible Assets” will be introduced without fail. This document significantly changes the regulations provided for by PA 14/2007. In our previous work, we examined the most significant changes in the area of recognition of intangible assets in accounting, as well as in the area of the initial measurement of these assets. In this article, we will analyze the main innovations in relation to the subsequent measurement of the above assets in the accounting of Russian organizations (including healthcare organizations). In addition, we will explore the most important problems that arise in this area and present proposals for their solution. When conducting research, such methods as analysis and synthesis, comparison, grouping method, analogy method, logical approach, systematic approach were used. As a result of the research, the changes we identified in the field of the subsequent measurement of intangible assets are combined by us into several groups. Within these groups, we have identified the main problems caused by future innovations. Also, for each of these problems, we have identified ways to solve them. The results obtained in this article will be useful to a wide range of readers interested in modern problems of accounting, including the subsequent measurement of intangible assets, can be used in the educational process of higher educational institutions, in the practical work of accounting departments, as well as in the development and improvement of relevant regulatory documents on accounting.

New approaches to the initial measurement of intangible assets in accounting: significant changes, problems and ways to solve them

Currently, the process of reforming Russian accounting is ongoing. The measurement of intangible assets is no exception. The relatively recently approved Federal Accounting Standard (FAS) 14/2022 “Intangible Assets” by the Ministry of Finance of the Russian Federation provides that the initial measurement of such assets will be carried out in accordance with FAS 26/2020 “Capital Investments”. The latter, in turn, was recently amended, making significant adjustments to the definition of this measurement. FAS 14/2022 and amendments to FAS 26/2020 are mandatory to come into effect from 2024. But their early application is also allowed by the decision of the organization. In addition, in order to prepare for future adjustments introduced by these standards, it is necessary to analyze the relevant changes now. In this article, we explore new approaches to the initial measurement of intangible assets in accounting. Other innovations of FAS 14/2022 and FAS 26/2020 will be analyzed by us in other works. As research methods, we used analysis and synthesis, comparison, grouping method, analogy method, logical approach, systematic approach. As a result of the research, all innovations in the field of the initial measurement of intangible assets are grouped by us into several groups, within which the main problematic issues due to the expected changes are identified. For each of these issues, we present proposals for their solution. The results presented in this paper will be useful to a wide range of readers interested in accounting issues, including the initial measurement of intangible assets, can be used in the educational process of higher educational institutions, in the practical work of accounting departments, as well as in the development and improvement of relevant regulatory documents on accounting.

The effect of PCAOB inspections on corporate innovation: evidence from deficiencies about the valuation of intangibles

I examine the economic consequences on corporate innovation when PCAOB inspections cite auditors for insufficient procedures in auditing the valuation of intangibles. I find that the clients of deficient auditors recognize larger and timelier impairments of intangibles, suggesting that affected auditors increase scrutiny about the valuation of intangibles in subsequent audits. This effect obtains only for valuation-related deficiencies and is salient for the clients of auditors who receive such deficiencies repeatedly. I also document real effects that the clients of deficient auditors exhibit less use of external mergers and acquisitions—which yield recognizable intangibles whose valuation is subject to increased auditor scrutiny. Overall, these results suggest that the intervention by the PCAOB effectively alters the measurement of intangibles and perhaps unintentionally affects how clients invest in corporate innovation.

Оптимальное распределение материальных и нематериальных благ: вмененные цены семейных и религиозных обязанностей

This study develops the economic approach to human relations and applicates the results of the equilibrium analysis on commodity and in marriage markets to the tangibles-intangibles trade-off. The paper examines the optimization between gifts and parental concern in large families, where children attractiveness is different. The model of parental concern confirms optimal equilibrium proportions on commodity and in marriage markets, derived from the golden ratio. The measurement of intangibles is based on the opportunity costs of tangibles to be given up. Shakespeare gives a literal illustration for the general gifts-concern equilibrium, when the corner solution of Cordelia to give up the heritage is equilibrated by the opposite corner solution of both Goneril and Regan to deprive King Lear of shelter. But the empirical confirmation of optimal proportions of general equilibrium can be got from primary source of tangibles-intangibles trade-off, the Old Testament, where one fifth of income on donations and five-times payback for the stolen ox had been prescribed. The model presented here derives these proportions from the golden ratio. It also describes the demonstrative tangibles-intangibles trade-off; golden ratio follows the continuity between Testaments and exhibits at the equilibrium the negative attractiveness of Pharisees, produced by their demonstrative righteousness.

‘Circular patents’ and dynamic capabilities: new insights for patenting in a circular economy

ABSTRACT This study investigates the intangible assets related to the circular economy, defined as ‘circular patents’, that are classified and measured to be bundled into the innovation capabilities of a firm. The impact of a business’s capabilities on its level of circular patent activism is empirically analysed in this study in a theoretical framework of dynamic capabilities. To this end, a model of the cause-and-effect relationship between the circular patents held by firms and their capabilities is designed using partial least squares structural equation modelling (PLS-SEM) and is tested using a sample of 120,406 patents in 2216 Spanish companies. In this analysis, patents that can foster the sharing economy and the circular economy in sensu latu are also considered circular patents, in addition to waste patents and other green patents, offering an enhanced measurement of the intangible assets related to the circular economy. Based on these results, this study provides new insight of how accounting can enable or constrain the transition to a circular economy business model through the measurement and valuation of related intangible assets and the specific business’ capabilities in an environmental management framework.

Strategic human capital analytics and organisation performance: The mediating effects of managerial decision-making

There is much enthusiasm for analytics and the measurement of intangibles, such as human capital. In stark contrast, the study of strategic human capital analytics is plagued with definitional disunity, a lack of empirical research, and inconsistent results from the handful of research studies that have been undertaken. This study contributes to the extant literature and academic debate through the original and foundational study of strategic human capital analytics effect on organisation and market performance and mediation by managerial decision-making drawn from the resource-based view, human resource accounting and persuasion theory. Our analyses, from a sample of 383 senior- and middle-level managers, suggest that managerial decision-making determines the extent to which strategic human capital analytics, as part of a strategic performance measurement and management system, improve organisation and market performance. Implications for theory and practice in this emergent field of study are discussed along with directions for future research.

Comparing the Effect of Intangible Assets and Macroeconomic Parameters on the Stock Prices in Firms Listed on the Stock Exchange of Iran, Saudi Arabia and Iraq

Comparing the Effect of Intangible Assets and Macroeconomic Parameters on the Stock Prices in Firms Listed on the Stock Exchange of Iran, Saudi Arabia and Iraq

Measurement of intangible assets using higher-order construct model

PurposeIntangible assets (IA) have been described as a multidimensional concept. However, there is a gap in research that considers IAs as a higher-order construct (HOC). Therefore, this paper aims to focus on demonstrating how IAs can be properly specified and measured as HOCs, given IA’s four major dimensions in small- and medium-sized enterprises (SMEs).Design/methodology/approachA HOC model is applied using a partial least squares–structural equation modeling (PLS-SEM) repeated-indicator approach. This approach helps validate the argument for considering IAs as HOCs by testing the basic requirements of the construct model.FindingsThe main finding from testing the model’s reliability, validity, multicollinearity and redundancy analysis indicates that the establishment of IAs as a HOC model is valid. Additionally, the simulation study results support the use of the proposed model.Research limitations/implicationsThe proposed model is believed to enhance the proper understanding of IAs and their relationship with organizational outcomes. Additionally, the model can inform organizational management of the integrative approach needed to effectively synchronize their strategic resources for improved performance of entrepreneurially growing SMEs.Originality/valueThis paper is the first to show the measurement of IAs as HOCs using PLS-SEM, based on IA’s updated dimensions. The authors believe that this paper paves the way for future discussion on IA measurement to conduct rigorous impactful studies with larger sample size.

Shadow prices for intangible resources

PurposeFocusing on managerial problems related to the measurement of intangibles, this paper develops and validates a hedonic-pricing methodology for the evaluation of the intangible resources of companies obtaining their shadow prices.Design/methodology/approachThe paper adapts a hedonic-pricing methodology developed primarily for markets in real estate and secondhand cars to define how much intangibles may contribute to companies' market value. A certain calibration of the original tool has been developed to make this methodology appropriate for interpretation and practical use. The main advantage of this approach is that it allows for an evaluation of the shadow prices of intangible resources. These prices can be interpreted as the market value of the intangible resources which are not reflected on the balance sheet.FindingsThe results of this study demonstrate that hedonic pricing with a self-selection correction generates robust estimates. As one can see, the positive contribution of a high endowment of intangibles for all shadow prices is confirmed through estimations using two different techniques. Meanwhile, the negative effect of a low endowment is even more evident for the baseline model. This model shows consistent negative shadow prices for the majority of underinvested intangibles. Brands have the highest shadow prices in the introduced models; human capital, as measured by the qualification of top management and investments in employees, has likewise demonstrated high prices. However, most structural resources seem to be not reflected to a large degree in companies' market value.Practical implicationsThis paper brings new opportunities to obtain the monetary value of intangible resources based on estimated market prices of a corporation's resource portfolio. These prices may be used for several purposes – for example, benchmarking for performance management, capital budgeting or knowledge-management practices. Moreover, by having methodological value, this study opens ways to evaluate any other intangibles which are not explicitly discussed in the empirical test of this particular study.Originality/valueThis study primarily contributes to the methodological advancement of evaluation of corporate intangible resources. It departs from the conventional hedonic-pricing mechanism to identify cogent estimates to intangibles in monetary terms. Importantly, this mechanism implies individual shadow prices for specific intangible resources which makes the contribution of this study unique for the existing literature, both within resource-based and value-based views.

Corporate Sustainability and Intangible Resources Binomial: New Proposal on Intangible Resources Recognition and Evaluation

This study argues that the context in which an organization adopts the principles of corporate sustainability and is guided by a culture of sustainability will determine the development of the components of corporate intangible resources. However, in trying to evaluate the impact of adopting the principles of corporate sustainability on the development of the intangible resources held by a company, we encountered a major problem, namely that there is no consistent and internationally accepted methodology for assessing such resources, despite theorists’ and practitioners’ efforts to develop intangible measurement techniques. The main research objective of this article is to propose the creation of a simplified model for the assessment of intangible resources, which depends only on publicly available information for each of the components of the model. This model can therefore contribute to the practical implementation of intangible resource management by offering an autonomous and objective instrument that uses only publicly available information, thus facilitating comparisons between organizations.

Measurement and reporting of intangible assets: orientation of Indian practitioners

Research studies capturing the opinion of practitioners on issues related to the domain of intangibles are very rare. This study attempts to highlight the importance of practitioners as the significant stakeholders in the process of measuring and reporting intangible assets. The data were collected from 164 top level practitioners from India. These practitioners included Chief Financial Officers, Cost and Works Accountants, Chartered Accountants, Companies Secretaries, and Chartered Financial Analysts. A structured questionnaire was prepared for the purpose of data collection. Relationship between orientation towards intangible assets and selected variables has been modelled using binary logistic regression. Results indicate that intangible assets covered under intellectual property legal framework are considered more important than other intangible assets. Methods, such as return on assets and market capitalization, are the most popular techniques for measurement of intangible assets. An attempt has been made to examine the determinants of orientation towards intangible assets. Practitioners, being an important link in the measurement and reporting process, deserve greater attention from both the regulators and researchers. The study is an original piece of work. The study provides an insight into the practitioners’ perspective on reporting and orientation towards intangible assets.

Subsequent measurement of intangible assets in the new federal accounting standard for public sector organizations

This article examines the regulations for the subsequent evaluation of intangible assets established by the new federal accounting standard for public sector organizations (including public health organizations in this sector). These regulations are analyzed in conjunction with the requirements of other regulatory documents on accounting. The author identifies the main problematic issues associated with the subsequent valuation of intangible assets of public sector organizations (including health organizations of the specified sector) and substantiates proposals for their solution.

THE APPLICATION OF FAIR VALUE ACCOUNTING IN BOSNIA AND HERZEGOVINA

This study investigates the application of fair value ac- counting in companies in Bosnia and Herzegovina. The study was conducted on a sample of 190 companies. The application of fair value accounting causes a lot of controversy related to the relevance and reliability of fair value information. It is believed that the extent to which fair value measurement is used reflects attitudes of financial statement preparers about the usefulness of this model at its best. The findings of this study sug- gest that most companies in Bosnia and Herzegovina do not have tendency to apply fair value accounting. It is found that half of the companies in the sample do not use fair value accounting at all. Almost half of the com- panies that use fair value accounting use it just because they own assets that require fair value measurement. Fair value accounting is much more used in financial and larger companies than in non-financial and smaller companies. Companies mostly use fair value accounting for the measurement of investment property. However, they use it for the measurement of intangible assets at a minimum. The findings also suggest that the application of fair value accounting increases the uncertainty in fi- nancial statements. The quality of fair value disclosures is very low. Numerous companies do not disclose infor- mation on fair value hierarchy and valuation techniques that were used for fair value measurement. Companies that disclose this information mostly use indirectly ob- servable inputs (Level 2) for fair value measurement and these create a lot of room for earnings management.

El intangible en los clubes brasileños: un análisis de los gastos con jugadores en las cuentas anuales

Given the importance of intangibles in the context of soccer, this article identifies the intangibles present in the financial statements of the main Brazilian clubs, comparing them and identifying which part of these values are related to the expenses with training, acquisition and renewal of contracts with athletes, in light of the accounting standards that allow (or require) these practices for Brazilian teams. The results point to a nominal growth in the group of intangible assets recorded in the balance sheets. In proportional terms, they represent more than 10% of the total assets in 2/3 of the selected sample, and in some cases represent more than 30% of the assets. In 26 of the 27 teams analyzed, the representativeness of the training and professional training expenses of athletes reached levels above 97% of the intangible. On average, 16.86% of the assets are represented by intangible assets, whose content that relates to player spending reaches, on average, 98.6%. The results indicate the importance of the research on methodologies for recognition and measurement of specific intangibles for soccer clubs. In a sport where athletes take a leading role and move high figures, considering the impact of this capital on financial statements is necessary, possible and requires debate, adequacy, standardization and expansion of current policies.

Intangibles and performance in oil and gas industry

PurposeThe purpose of this paper is to assess the extent to which financial and market performance of companies in the oil and gas sector can be attributed to the value of their intangibles.Design/methodology/approachThe research utilized publicly available data on global oil and gas companies from 2000 to 2015. Panel data analysis was used to assess the relationship between intangibles (measured by Calculated Intangible Value (CIV)) and financial and market performance of these companies.FindingsResults show that intangibles had a significant impact on firm performance in multiple financial measures. Firms’ intangibles also influence their market capitalization, indicating that the financial markets discount such information in their pricing.Research limitations/implicationsAlthough the impact of intangibles on corporate performance is found to be significant, the size of that impact is small, suggesting that significant increase in the size of intangibles would only lead to a modest increase in corporate performance. Additionally, the research sample was limited to the top oil and gas firms listed in the Fortune 2000 global list and limits the generalization of the findings. Despite these limitations, the research provides greater confidence in using CIV to assess intangibles in organizations.Practical implicationsThis research highlights the importance and ways of measurement of intangibles for managers in oil and gas companies and its significance for their firms’ performance.Originality/valueThe paper fills the gap in the literature in the assessment of intangibles in the oil and gas sector, as well as in the assessment of using CIV to measure the impact of intangibles on company performance.

MEASUREMENT OF INTANGIBLE ASSETS IN RECOVERY AREAS AND OPERATION OF NATURAL RESOURCES

The paper shows that to date, intangible assets are considered "goods" and as such, the practice of classical accounting consider intellectual capital in the same category of "goods equivalent / similar to those visible / tangible". From research that literature on measuring knowledge assets / intellectual capital, both in Romania and worldwide, is not large enough and does not provide finite significant "strong" on classifications semantic of the content and quality issues in the field. The book titled New Economy between knowledge and risk – Infomin Ed., Deva, 2010 (www.infomindeva.ro) (ISBN 978-973-7646-11-8), (Ioan I. Gâf-Deac) presents systematization and classification of original models and methodologies for measuring knowledge assets, intellectual capital in socio-economic sciences, and as such, in this present article resorting to the extension applied to formalizing measurement of intangible assets in areas operation and exploitation of natural resources.