Accounting for Data Assets

Abstract

We provide survey and empirical evidence on a new accounting rule in China that addresses the recognition and disclosure of data resources. Using two rounds of surveys of Chinese listed firms, complemented by archival data from 2024 financial reports, we examine how firms perceive and respond when allowed to recognize data as assets in financial statements. Our findings reveal a pronounced gap between the perceived value of data and the limited recognition practices, with only about 2% of firms reporting data assets in fiscal 2024. Firms initially view the rule as beneficial, but these perceived benefits decline over time, while concerns over the costs of compliance remain high. Firms see compliance costs outweighing benefits and thus adopt a wait-and-see approach. Overall, our study offers novel insights into the first accounting rule worldwide for data resources and provides policy implications for improving the accounting for and disclosure of intangibles.

Keywords: Data Assets, Intangibles, Accounting Standard, China, Digital Economy, Survey

JEL Classification: G10, M41, M48