Search results

1 – 10 of over 22000
Article
Publication date: 28 January 2020

Nevine El-Tawy

This paper aims to present a comprehensive view of the assets recognition criteria by providing a coherent set of pre-measurement themes that should be taken into consideration to…

Abstract

Purpose

This paper aims to present a comprehensive view of the assets recognition criteria by providing a coherent set of pre-measurement themes that should be taken into consideration to be a candidate asset.

Design/methodology/approach

This paper is a conceptual review paper.

Findings

This synthesis review results in seven themes; the social constructionist nature of the conceptual framework (CF), the nature of assets, the changing nature of asset recognition, asset measurement bases, entity-specific vs market-specific recognition, the economic resource comprising “rights”, and finally, the role of “separability” in asset recognition.

Originality/value

With the increasing importance of internally created assets and their implications on the financial position of the business entity, and with coinciding of revisiting the CF for financial reporting (at the time of writing this paper), this paper shows a synthesis and comprehensive themes of asset-based recognition criteria for tangible and intangibles assets.

Details

Journal of Financial Reporting and Accounting, vol. 18 no. 2
Type: Research Article
ISSN: 1985-2517

Keywords

Open Access
Article
Publication date: 4 May 2023

Paweł Mielcarz, Dmytro Osiichuk and Inna Tselinko

The article investigates the patterns of asset impairment recognition in search of signs of “big bath” earnings management practices across an internationally diversified sample…

Abstract

Purpose

The article investigates the patterns of asset impairment recognition in search of signs of “big bath” earnings management practices across an internationally diversified sample of public companies. It also elucidates the incentives that may underlie such practices and explores possible safeguards embedded in the existing corporate governance mechanisms.

Design/methodology/approach

The article applied static panel and binary logit models to an international firm-level panel dataset of 1045 public companies observed between 2003 and 2018.

Findings

Our empirical results suggest that recognition of asset impairment has no determinate impact on earnings volatility. Investigating the possibility of “big bath” earnings management practices, the authors found no impact of asset impairment recognition on total senior executive compensation in firms, which pay performance-based remuneration. The quality of corporate governance has appeared to impact the firms’ intertemporal proclivity to recognize asset impairment with those having the more entrenched and management-controlled boards being more likely to time impairment recognition by delaying it during exceptionally good and exceptionally bad years. While generally unlikely, recognition of asset impairment in a period with a recorded negative operating performance is found to be closely associated with key executive departures.

Originality/value

The article corroborates the salient role of corporate governance mechanisms in shaping the intertemporal patterns of asset impairment recognition. The possible remedies to the phenomenon should be derived therefrom.

Details

Central European Management Journal, vol. 31 no. 2
Type: Research Article
ISSN: 2658-2430

Keywords

Article
Publication date: 6 April 2010

Tony Tollington and Nevine El‐Tawy

This paper seeks is to enhance our understanding of intangible recognition by embracing an artefact‐based approach.

2722

Abstract

Purpose

This paper seeks is to enhance our understanding of intangible recognition by embracing an artefact‐based approach.

Design/methodology/approach

The paper presents an artefact‐based approach to intangible asset recognition, an artefact being a physical and visual representation (typically, documentary) of expended human intellectual and physical creativity. This output orientation (what people create: artefact‐based outputs) is compared to an input orientation (the investment inputs in human “assets”) using artefact‐based asset recognition criteria that have already received some exposure in the marketing literature in respect of brands.

Findings

Emphasis is placed on outputs, i.e. what people create, rather than on the more familiar input orientation, which focuses on investments in human assets. When compared to an output orientation, the more familiar input orientation is an unsatisfactory basis on which to recognise human assets.

Practical implications

The asset recognition criteria provide a useful checklist by which to delineate an intangible asset from an expense.

Originality/value

The criteria have already been applied to brand assets in the marketing domain. It is now being applied for the first time to human assets.

Details

Journal of Human Resource Costing & Accounting, vol. 14 no. 1
Type: Research Article
ISSN: 1401-338X

Keywords

Article
Publication date: 1 October 2006

Christian Riegler and Christian Höllerschmid

Specific asset recognition rules often bar expenses for research and development (R&D) from recognition on corporate balance sheets. This tangible‐intangible accounting asymmetry…

2759

Abstract

Purpose

Specific asset recognition rules often bar expenses for research and development (R&D) from recognition on corporate balance sheets. This tangible‐intangible accounting asymmetry has led to the development of intellectual capital reports (ICRs) for intangibles in general and for R&D in particular. Thus, two dichotomous reporting formats coexist in corporate disclosure. The purpose of this article is to bring together more closely the information on project intangibles from R&D provided by voluntary and mandatory reporting systems.

Design/methodology/approach

The authors used an experimental case study approach in a joint research project with a non‐university research and technology organisation (RTO). The methods deployed in the project included semi‐structured interviews, Delphi techniques and normative reasoning.

Findings

The results show that it is possible to use financial reporting's systematic approach and typical layout to ally the presumed strengths of financial reporting (i.e. the existence of standardised ways of interpretation and an educated readership) and indicator‐based ICRs (i.e. the capability of capturing the generic features of innovation activity).

Practical implications

Given the predominance of financial reporting's educated readership, it is useful to produce voluntary disclosures in such a form that the information can easily be embedded in the overall picture painted by financial numbers.

Originality/value

Inductive‐analytical ICRs are typically not intertwined with financial accounting. The article elaborates on linkages between financial accounting and inductive‐analytical reporting models and proposes a classification scheme for project intangibles from R&D based on information reliability.

Details

Journal of Intellectual Capital, vol. 7 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 1 August 1998

Tony Tollington

Purchased goodwill conforms to the current accounting definitions of an asset. However, as the descriptive framework contained within this paper will show, purchased goodwill is…

3867

Abstract

Purchased goodwill conforms to the current accounting definitions of an asset. However, as the descriptive framework contained within this paper will show, purchased goodwill is not an asset and, therefore, should not be shown on the balance sheet. This would not necessarily matter, from a marketing viewpoint, was it not for the linkage of brand asset recognition to purchased goodwill asset recognition. Currently, the recognition of a purchased goodwill asset tends to be a prerequisite for the recognition of a brand asset extracted from it. If it can be shown that purchased goodwill is not an asset, then the prerequisite disappears. The widespread recognition of brand assets is then unfettered by its association with purchased goodwill. Weakening the basis for the recognition of a purchased goodwill asset is an important first step in encouraging the accounting profession to devise new ways of dealing with the different kinds of intangible assets that are becoming paramount in the governance of companies.

Details

Journal of Product & Brand Management, vol. 7 no. 4
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 June 1998

Tony Tollington

This paper examines the boundary within which the recognition of an asset currently takes place. It proposes the establishment of a new boundary based upon “separability” which…

5763

Abstract

This paper examines the boundary within which the recognition of an asset currently takes place. It proposes the establishment of a new boundary based upon “separability” which would allow internally created or home‐grown assets to be recognised on the balance sheet. It provides a new definition of brand assets so that, whether purchased separately or as part of goodwill or internally created by a business, brands can be recognised as assets within a new boundary.

Details

Journal of Product & Brand Management, vol. 7 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 June 1999

Tony Tollington

Examines the various brand asset recognition methods used by the accounting profession, within their existing rules, to highlight, first, the restrictive nature of a brand asset’s…

3952

Abstract

Examines the various brand asset recognition methods used by the accounting profession, within their existing rules, to highlight, first, the restrictive nature of a brand asset’s current attachment to purchased goodwill and, second, the restrictive requirement for brand asset recognition to be derived solely from a “transaction or event”. Then examines the latest rule change, FRS10, to assess whether the recognition of brand assets is likely to remain restrictive in the future. It concurs with Murphy’s view that brand asset recognition on the balance still continues to be an accounting exercise which is “fudged”.

Details

Journal of Product & Brand Management, vol. 8 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 January 1996

STEPHEN MORROW

This paper considers whether the prospective services provided by a football player on behalf of the club holding his registration can be recognised as an accounting asset. The…

2829

Abstract

This paper considers whether the prospective services provided by a football player on behalf of the club holding his registration can be recognised as an accounting asset. The first section of the paper considers the appropriateness of treating these prospective services as intangible assets within the terms of the UK Accounting Standards Board criteria for definition and recognition of assets. In the second section, four valuation methodologies are evaluated using case study data made available by a major Scottish club. Each of the methods evaluated is either currently used in accounting practice by some clubs, or is used in some form in the existing market place for players. The historical cost model involves capitalising players acquired by the club via the transfer market on the balance sheet at their cost of registration. The earnings multiplier model applies a multiplier to a player's earnings to produce a current valuation of that player. The third model involves capitalising players at directors' valuation, while the independent multiple player evaluation model involves obtaining valuations for players from various informed sources, knowledgeable on those particular players. The paper concludes that there are convincing arguments for the conceptualisation of the services provided by football players as accounting assets, and recommends an system of valuation in which players are valued at their realisable value by independent experts.

Details

Journal of Human Resource Costing & Accounting, vol. 1 no. 1
Type: Research Article
ISSN: 1401-338X

Article
Publication date: 14 September 2015

Frank Schiemann, Kai Richter and Thomas Günther

The capitalisation of intangible investments is discussed controversially in the financial accounting literature. International accounting standards are concerned with this issue…

2064

Abstract

Purpose

The capitalisation of intangible investments is discussed controversially in the financial accounting literature. International accounting standards are concerned with this issue and generally demand more intellectual capital to be recognised on the face of the balance sheet. If investors and analysts already gather monetary information about intangible assets from the financial report and find such information useful, then the necessity to complement such information with voluntary intellectual capital disclosure will diminish. Accordingly, there should be an association between recognised intangible assets and voluntary intellectual capital disclosure. The paper aims to discuss these issues.

Design/methodology/approach

The authors analyse the voluntary disclosure of 264 investor conference and roadshow presentations of German DAX 30 firms in the year 2001, 2003, 2005, and 2007. The authors apply regression models to analyse the association between recognition of intangible assets and voluntary intellectual capital disclosure and control for other determinants of voluntary disclosure.

Findings

The authors find that the magnitude of recognised intangible assets is significantly and negatively associated with the quantity and quality of voluntary intellectual capital disclosure. The authors show that this association is mainly driven by goodwill accounting. In more detailed analyses we find different directions (positive, negative and insignificant) of this relationship for different categories of intellectual capital.

Research limitations/implications

Future studies on voluntary intellectual capital disclosure need to consider recognised intangible assets as a determinant to avoid omitted variable problems.

Practical implications

The authors provide descriptive evidence about voluntary intellectual capital disclosure practice of Germany’s largest firms.

Originality/value

The paper provides primary evidence on the association between recognised intangible assets and voluntary intellectual capital disclosure.

Details

Journal of Applied Accounting Research, vol. 16 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 19 October 2010

Nevine El‐Tawy and Tony Tollington

The purpose of this paper is to present asset recognition criteria based on the idea that an asset should be functional, separable and measurable and that financial recognition…

1110

Abstract

Purpose

The purpose of this paper is to present asset recognition criteria based on the idea that an asset should be functional, separable and measurable and that financial recognition should be triggered by the recognition of an artefact.

Design/methodology/approach

Criteria is applied to four organisational assets, that is, those intangible assets that are unlikely to be reported in the accounting domain.

Findings

The criteria is applied in order to show how one may expand the basis on which assets can be reported financially to elements of intellectual capital as well as financial capital.

Originality/value

Artefact‐based asset recognition criteria could be a conduit through which intellectual capital could enter the accounting domain, a domain dominated by the maintenance of financial capital, not intellectual capital.

Details

Journal of Intellectual Capital, vol. 11 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

1 – 10 of over 22000