Influence of Internally Generated Intangible Assets on Financial Statements Prepared in Accordance with IFRS

Vašek, Libor; Filinger, Marek

doi:10.18267/j.efaj.104

Cited by 3 publications

(2 citation statements)

References 4 publications

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“…Even though the IAS 38 imposes the capitalization of development expenditures if specific requirements are met, companies can exercise judgments to distinguish between research and development phases and assess the commercial viability and technical feasibility of the outcomes. Also, the assessment of the fulfilment of requirements is under the estimation of managers (Vašek, Filinger, 2013). Fuentes and Persson (2011) found that Swedish listed companies capitalize R&D to smooth earnings.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Intangible Assets, Goodwill and Earnings Management: Evidence from France and the Uk

Kimouche

2022

Folia Oeconomica Stetinensia

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Research background: The literature has argued that accounting for intangible assets and goodwill provides a wide range for managers to manipulate earnings. Purpose: This paper aims to investigate the impact of accounting treatment of intangible assets and goodwill on earnings management. Research methodology: The study included 115 French companies and 100 UK companies, during 2011–2019, employing multiple regression, where earnings management was measured through discretionary accruals; while accounting for intangibles and goodwill was divided into the capitalization and decapitalization of intangible assets, recognition and derecognition of goodwill, and depreciation and impairment of intangible assets and goodwill. Results: According to the results, accounting for intangible assets and goodwill has an impact on earnings management, while it is used differently between French and UK companies. In France, companies employ intangible assets capitalization to manipulate earnings, while UK companies use intangible assets capitalization and goodwill recognition. Novelty: This study provides supplementary evidence for standards setters, managers, and auditors about the contribution of accounting for intangible assets and goodwill in the quality of financial reporting and explores the new tools and practices of earnings management.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Intangible Assets, Goodwill and Earnings Management: Evidence from France and the Uk

Kimouche

2022

Folia Oeconomica Stetinensia

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“…Corporate intangible assets can be either purchased (individually or as part of a business combination) or internally generated (Vašek & Filinger, 2013). Goodwill is an intangible asset that is typically paid for in a business combination when the consideration paid to acquire the target company exceeds the fair value of the target's net assets (Robinson, Henry, Pirie, & Broihahn, 2012).…”

Section: Introductionmentioning

confidence: 99%

Full-Goodwill Method of Accounting for Business Combinations and Quality of Financial Statements

Welc¹

2015

JMAA

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Accounting goodwill arises as a result of business combinations and appears in a consolidated balance sheet of an acquirer. It is an intangible asset which reflects an excess of value of an acquired business as a whole over a summed value of its identifiable net assets. Since 2010, the International Financial Reporting Standards (IFRS) allow for two alternative methods of measuring goodwill in those business combinations, where an acquirer obtains a control over a target company without obtaining 100% share in its shareholder's equity. Under one of these methods, which is called a "full-goodwill method", the goodwill attributable to non-controlling interests in subsidiary is measured at fair value. Thus, the main accounting problem with this method lies in its requirement to estimate the fair value of non-controlling interests. This paper suggests that the "full-goodwill method" may sacrifice financial statement reliability for its alleged relevance, with significant potential for "creative accounting".The problems with reliability and transparency of financial statements, when "full-goodwill method" is applied, are illustrated by a real-life example of the takeover of Formula Systems Ltd. by Asseco Group (one of the biggest IT companies in Europe, listed on the Warsaw Stock Exchange).

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Теоретично-Організаційні Аспекти Аналізу Наявності Та Ефективно Го Використання Нематеріальних Активів Підприємства

Дерун¹,

Цилюрик²

2022

МВ

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У статті висвітлено найбільш поширені напрямки економічного аналізу нематеріальних активів. За результатами аналізу виділених напрямів встановлено, що при їх застосуванні значна кількість дослідників не повною мірою враховує специфічні властивості нематеріальних активів. Для вирішення цієї проблеми запропоновано інформаційно-організаційну модель проведення аналізу нематеріальних активів, яка включає визначення мети та основних завдань з використанням різноманітних джерел інформації, використання загально-наукових та спеціальних методів економічного аналізу тощо. Особливу увагу у статті присвячено коефіцієнтному та факторному аналізу нематеріальних активів. Зокрема, автором виділено три основні групи коефіцієнтів, які найчастіше використовуються в практиці та запропоновано детерміновану мультиплікативну модель для проведення детермінованого факторного аналізу рентабельності нематеріальних активів.

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Influence of Internally Generated Intangible Assets on Financial Statements Prepared in Accordance with IFRS

Cited by 3 publications

References 4 publications

Intangible Assets, Goodwill and Earnings Management: Evidence from France and the Uk

Intangible Assets, Goodwill and Earnings Management: Evidence from France and the Uk

Full-Goodwill Method of Accounting for Business Combinations and Quality of Financial Statements

Теоретично-Організаційні Аспекти Аналізу Наявності Та Ефективно Го Використання Нематеріальних Активів Підприємства

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