Immaterielle anlægsaktiver: En gennemgang af regnskabspraksis med fokus på usynlige aktiver og virksomheders rapportering heraf

Charlotte Ravnsmed Bøgeskov

Student thesis: Diploma thesis

Abstract

This thesis concludes the study of Graduate Diploma in Business Administration (Financial and Management Accounting) at Copenhagen Business School. 2.1 The problem The development of the economy towards a knowledge based economy, where the earnings increasingly are driven by intangible assets, both assets which are recognized in the annual report and those which are invisible in the financial statement. This problem has led to the following problem statement and supporting research questions: Carry out a review of the current accounting policy for intangible assets, and review relevant types of intangible assets, including describing the nature and determine whether they can be recognized in the balance or not, to identify any issues for companies that share fundamental values enshrined in "invisible assets". This knowledge is used in an analysis of the need for information of an annual report user and the annual report from listed companies. 1. How are the current accounting policies for intangible assets? 2. Which intangible assets is recognized in the balance sheet, and which are not, and what are the basis for this? 3. What needs and expectations does the user of the annual report have, regarding the annual report? 4. How do listed entities report about their value-drivers? 5. Can the listed entities improve their reporting to benefit the user of the annual report? The above are all means to answer the main question, which reads as follows: Are companies able to sufficiently report on significant intangible assets, whether these can be recognized in the balance sheet or not? 2.2 The analysis In addressing the identified problem and associated research questions, I have gone through four phases. In the first phase I treated the accounting practices based on the conceptual framework, and the specific requirements for recognition, measurement and presentation of intangible assets. This thesis concludes the study of Graduate Diploma in Business Administration (Financial and Management Accounting) at Copenhagen Business School. 2.1 The problem The development of the economy towards a knowledge based economy, where the earnings increasingly are driven by intangible assets, both assets which are recognized in the annual report and those which are invisible in the financial statement. This problem has led to the following problem statement and supporting research questions: Carry out a review of the current accounting policy for intangible assets, and review relevant types of intangible assets, including describing the nature and determine whether they can be recognized in the balance or not, to identify any issues for companies that share fundamental values enshrined in "invisible assets". This knowledge is used in an analysis of the need for information of an annual report user and the annual report from listed companies. 1. How are the current accounting policies for intangible assets? 2. Which intangible assets is recognized in the balance sheet, and which are not, and what are the basis for this? 3. What needs and expectations does the user of the annual report have, regarding the annual report? 4. How do listed entities report about their value-drivers? 5. Can the listed entities improve their reporting to benefit the user of the annual report? The above are all means to answer the main question, which reads as follows: Are companies able to sufficiently report on significant intangible assets, whether these can be recognized in the balance sheet or not? 2.2 The analysis In addressing the identified problem and associated research questions, I have gone through four phases. In the first phase I treated the accounting practices based on the conceptual framework, and the specific requirements for recognition, measurement and presentation of intangible assets.This thesis concludes the study of Graduate Diploma in Business Administration (Financial and Management Accounting) at Copenhagen Business School. 2.1 The problem The development of the economy towards a knowledge based economy, where the earnings increasingly are driven by intangible assets, both assets which are recognized in the annual report and those which are invisible in the financial statement. This problem has led to the following problem statement and supporting research questions: Carry out a review of the current accounting policy for intangible assets, and review relevant types of intangible assets, including describing the nature and determine whether they can be recognized in the balance or not, to identify any issues for companies that share fundamental values enshrined in "invisible assets". This knowledge is used in an analysis of the need for information of an annual report user and the annual report from listed companies. 1. How are the current accounting policies for intangible assets? 2. Which intangible assets is recognized in the balance sheet, and which are not, and what are the basis for this? 3. What needs and expectations does the user of the annual report have, regarding the annual report? 4. How do listed entities report about their value-drivers? 5. Can the listed entities improve their reporting to benefit the user of the annual report? The above are all means to answer the main question, which reads as follows: Are companies able to sufficiently report on significant intangible assets, whether these can be recognized in the balance sheet or not? 2.2 The analysis In addressing the identified problem and associated research questions, I have gone through four phases. In the first phase I treated the accounting practices based on the conceptual framework, and the specific requirements for recognition, measurement and presentation of intangible assets. In the next phase, I went through relevant types of intangible assets and determined whether these can be recognized or not. In the third phase, I undertook an assessment of the needs and expectations of the annual report user. In addition I explained what alternative methods for reporting non-financial information, there is. In the fourth and final phase, I presented the concept of "value reporting", and on basis of the "ValueReporting Framework", I made a set of expectations of what companies at least should describe in their annual report. I used these expectations when reviewing the annual reports of four Danish listed companies. 2.3 The results The analysis, as mentioned above, gave rise to the conclusions in the following. The current accounting practices do not sufficiently allow recognition of intangible assets, that have a material impact on the earnings. Thus a large number of internally generated intangible assets are not recognized, because the calculation of cost is associated with too much uncertainty and it is difficult to separate the development of these assets, from the development of the company itself. This raises challenges for the user of the annual report, because he doesn't get a sufficient and complete picture of the company by reviewing the traditional financial reporting. This makes it difficult to assess the company and to value the stock. The conclusion of the review of the annual reports, is that the companies generally are good at describing the treatment and the importance of the intangible assets recognized in the balance sheet. They also described the objectives and strategies satisfactory, it is important to mention that some of the companies, made the importance of invisible assets, visible for the achievement of future goals and ambitions. However, the companies were poorly in describing the treatment of intangible assets, which are not recognized in the balance sheet. In addition a clear identification of the companies' value-drivers was missing, regardless of the accounting treatment. In the light of the above, the overall conclusion is, that the regulation of both qualitative and quantitative data in the annual report does not adequately account for the increasing interest and value in intangible assets. In addition, the companies does not manages to make it clear to users, what value-drivers there are in the company and how this is reflected in the financial presentations.

EducationsGraduate Diploma in Financial and Management Accounting, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2012
Number of pages93