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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.

This paper is a conceptual review paper.

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.

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.

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.

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.

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

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.

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

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.

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”.

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.

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.

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.

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

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

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

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.

This paper presents an examination of the cognitive assumptions underpinning the accounting recognition of assets, in particular, internally created intangible assets such as brands, software and patents. The purpose is to examine, in broad terms, how accountants view these assets and, also, to assess whether accountants, themselves, are aware of the restrictive nature of their disclosure practices. It is supported by a small questionnaire of accountants to see whether there is some support for this assertion. Intangible assets are becoming paramount in the governance of companies and it is, therefore, pertinent for management to have relevant financial information about them. An important first step is to persuade accountants to recognise them.

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.

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.

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).

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.

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.

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.

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

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.

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.