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Ending the Accounting-for-Intangibles Status Quo

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  • Baruch Lev

Abstract

The surge of corporate intangible investments is the hallmark of developed economies, radically transforming the business models, strategies, and performance of business enterprises. Accounting standard-setters, however, by and large, are oblivious to this world-wide development. I establish in this study that this accounting resistance to change seriously harms investors and the economy-at-large, and accordingly I propose feasible remedial changes to the accounting system to adapt it to economic reality. I discuss implementation issues of the proposed change, and the reasons for the three-decade resistance of accounting standard-setters to change the accounting of intangibles. Finally, in order to facilitate the accounting change, I outline a wide-ranging, policy-oriented research agenda on intangibles and related issues.

Suggested Citation

  • Baruch Lev, 2019. "Ending the Accounting-for-Intangibles Status Quo," European Accounting Review, Taylor & Francis Journals, vol. 28(4), pages 713-736, August.
    • Handle: RePEc:taf:euract:v:28:y:2019:i:4:p:713-736
    DOI: 10.1080/09638180.2018.1521614
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    Cited by:

    1. He, Junnan & Calder, Bobby J., 2020. "The experimental evaluation of brand strength and brand value," Journal of Business Research, Elsevier, vol. 115(C), pages 194-202.
    2. Kim T. Baumgartner & Carolin A. Ernst & Thomas M. Fischer, 2022. "How Corporate Reputation Disclosures Affect Stakeholders’ Behavioral Intentions: Mediating Mechanisms of Perceived Organizational Performance and Corporate Reputation," Journal of Business Ethics, Springer, vol. 175(2), pages 361-389, January.
    3. Rolf Uwe Fülbier & Thorsten Sellhorn, 2023. "Understanding and improving the language of business: How accounting and corporate reporting research can better serve business and society," Journal of Business Economics, Springer, vol. 93(6), pages 1089-1124, August.
    4. Dinh, Tami & Schultze, Wolfgang, 2022. "Accounting for R&D on the income statement? Evidence on non-discretionary vs. discretionary R&D capitalization under IFRS in Germany," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 46(C).
    5. Hannu Schadewitz & Jonas Spohr, 2022. "Gender diverse boards and goodwill changes: association between accounting conservatism, gender and governance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(3), pages 757-779, September.
    6. Angelos A. Antzoulatos & Dimitris Karanastasis & Thomas Syrmos, 2022. "The Puzzling Convergence of Intangible Investments," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 28(3), pages 171-182, November.
    7. Carol Corrado & Jonathan Haskel & Massimiliano Iommi & Cecilia Jona-Lasinio & Filippo Bontadini, 2023. "Data, Intangible Capital, and Productivity," NBER Chapters, in: Technology, Productivity, and Economic Growth, National Bureau of Economic Research, Inc.
    8. Thorsten Sellhorn, 2020. "Machine Learning und empirische Rechnungslegungsforschung: Einige Erkenntnisse und offene Fragen [Machine Learning and Empirical Accounting Research: Some Findings and Open Questions]," Schmalenbach Journal of Business Research, Springer, vol. 72(1), pages 49-69, March.
    9. Hasan, Mostafa Monzur & Lobo, Gerald J. & Qiu, Buhui, 2021. "Organizational capital, corporate tax avoidance, and firm value," Journal of Corporate Finance, Elsevier, vol. 70(C).
    10. Krivogorsky, Victoria & Mintchik, Natalia & Alon, Anna, 2023. "Accounting research in former Soviet bloc countries: Past trends and current and future developments," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 50(C).
    11. Meir Russ, 2021. "Knowledge Management for Sustainable Development in the Era of Continuously Accelerating Technological Revolutions: A Framework and Models," Sustainability, MDPI, vol. 13(6), pages 1-32, March.
    12. Kannan, Yezen & Khallaf, Ashraf & Gleason, Kimberly & Bostan, Ibrahim, 2023. "The relationship between R&D intensity, conservatism, and management earnings forecast issuance," Advances in accounting, Elsevier, vol. 62(C).
    13. Rubina Canesi & Giuliano Marella, 2022. "Towards European Transitions: Indicators for the Development of Marginal Urban Regions," Land, MDPI, vol. 12(1), pages 1-20, December.
    14. Regier, Matthias & Rouen, Ethan, 2023. "The stock market valuation of human capital creation," Journal of Corporate Finance, Elsevier, vol. 79(C).

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