Accounting for Intangible Investments

Forthcoming in Australian Accounting Review

33 Pages Posted: 10 Mar 2008 Last revised: 26 Mar 2009

See all articles by Anne Wyatt

Anne Wyatt

University of Queensland

Margaret A. Abernethy

University of Melbourne, Department of Accounting

Date Written: 2008

Abstract

The traditional categorisation of expenditures evident in many firms' Charts of Accounts and the financial statements does not identify and measure expenditures on intangible investment separately from tangible investment and operating expenditures. This contrasts with the accounting for tangible investment, which separately accounts for all expenditures as assets unless the future benefits are consumed in a single accounting period. Further, in searching for better ways to account for intangibles, to date, regulators and researchers have focused on the accounting choice problem relating to the existence and recognisability of intangible assets. In this paper, we argue that identifying and separately reporting the expenditures on intangible investment is the logical first step in accounting for intangible investments. Learning about the firm's categories of value driving (and sometimes potentially value destroying) expenditures has important implications for understanding aspects of the value chain, performance measurement, valuation, corporate governance, and the external audit.

Keywords: intangible investment, expenditures, accounting, property rights

JEL Classification: M21, M41, M44, G34

Suggested Citation

Wyatt, Anne and Abernethy, Margaret A., Accounting for Intangible Investments (2008). Forthcoming in Australian Accounting Review. Available at SSRN: https://ssrn.com/abstract=1103432 or http://dx.doi.org/10.2139/ssrn.1103432

Anne Wyatt (Contact Author)

University of Queensland ( email )

4072 Brisbane, Queensland
Australia
61 0419125779 (Phone)
61 7 33656988 (Fax)

Margaret A. Abernethy

University of Melbourne, Department of Accounting ( email )

Victoria
Melbourne, Victoria 3010 3010
Australia
+61 3 8344 7655 (Phone)
+61 3 9349 2397 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
472
Abstract Views
3,713
rank
62,955
PlumX Metrics