Accounting for the Stars: Changing Financial Practices in the Space Industry

The emergence of the New Space Age is bringing incredible business opportunities, while also leading to numerous challenges and a need for higher accountability. In light of these challenges, the aim of the present study is to highlight how the development of space-related activities affects conventional accounting practices and what changes may be needed to redefine these practices for the space industry. A systematic literature review approach was adopted to examine space-related challenges that may determine the need for redefining some of the contemporary financial accounting practices. An inductive approach, based on the challenges and issues identified, has been adopted to determine three key financial accounting areas that require revision in the context of the space industry. The study’s findings are centered on the financial statements’ context and purpose, accounting principles, and the qualitative characteristics of financial information, as well as the recording of space transactions and events. Based on these three main areas, we suggest that companies in the space industry should adapt their governance practices to create more transparency and trust to their stakeholders, reassess how some accounting principles are being addressed, and provide a series of suggestions in terms of reconsidering the recording of space transactions and events. This study provides important insights with regards to space accounting, with implications for academia and the accounting profession.