Identifying Corporate Expenditures on Intangibles Using GAAP
This paper aims to show how firms account for expenditure on their intangible investments and how this influences their decision making processes. Evidence from our survey of 614 large Australian companies show that (1) firms do not systematically identify and separate expenditures on intangible investment from expenditures on tangible investment and operating expenditures; and (2) this leads to an information gap that adversely affects the firm's internal processes for evaluating the decision to invest in intangibles. The paper builds a deductive argument for the use of the general purpose financial reporting system (GAAP) to separate and report the expenditures on intangibles by corporations in a way that is consistent and comparable across firms and over time. Our evidence suggests that investment decisions by management and investors, where intangibles are involved, are likely to be based more on rules-of-thumb than objective evidence.
|Date of creation:||May 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +61 3 8344 2100
Fax: +61 3 8344 2111
Web page: http://www.melbourneinstitute.com/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000.
"Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not),"
NBER Working Papers
7552, National Bureau of Economic Research, Inc.
- Wesley M Cohen & Richard R Nelson & John P Walsh, 2003. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (Or Not)," Levine's Working Paper Archive 618897000000000624, David K. Levine.
- Martin N. Baily & Robert Lawrence, 2001.
"Do We Have A New E-Conomy?,"
NBER Working Papers
8243, National Bureau of Economic Research, Inc.
- Stefano Brusoni & Orietta Marsili & Ammon Salter, 2005.
"The role of codified sources of knowledge in innovation: Empirical evidence from Dutch manufacturing,"
Journal of Evolutionary Economics,
Springer, vol. 15(2), pages 211-231, January.
- Stefano Brusoni & Orietta Marsili & Ammon Salter, 2002. "The role of codified sources of knowledge in innovation: empirical evidence from Dutch manufacturing," SPRU Working Paper Series 80, SPRU - Science and Technology Policy Research, University of Sussex.
- Clarkson, Peter M & Thompson, Rex, 1990. " Empirical Estimates of Beta When Investors Face Estimation Risk," Journal of Finance, American Finance Association, vol. 45(2), pages 431-53, June.
When requesting a correction, please mention this item's handle: RePEc:iae:iaewps:wp2009n12. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (James Davis)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.