scholarly journals Recognizing Intellectual Capital As An Asset

2014 ◽  
Vol 12 (2) ◽  
pp. 177 ◽  
Author(s):  
Mary Fischer ◽  
Treba Marsh
Keyword(s):  
Knowledge Management ◽  
Intellectual Capital ◽  
Measurement Techniques ◽  
Balance Sheet ◽  
Fair Value ◽  
Measurement Model ◽  
Financial Accounting ◽  
Definition Of ◽  
Value Measurement ◽  
Stakeholder Communication

The revised definition of an asset by the FASB and GASB gives way to the recognition of the fair value of another off-balance sheet value. Interest in recognizing intellectual capital as an asset of the organization has grown out of dissatisfaction with traditional financial accounting and reporting directed toward manufacturing, trading of goods, and service activities which ignore the organizational asset values based on knowledge, expertise and technology. The growing interest in intellectual capital (IC) and knowledge management reflects an awareness of the need for identification, utilization, and measurement of an organizations most valuable asset. This paper identifies the importance of the IC value, discusses the research emphasis placed on it by others, and develops a fair value measurement model. The model provides a basis not only for identifying crucial aspects of effective knowledge management, but also for emphasizing the interdependence, and the synergy that may be created through recognition. Measurement techniques are presented together with a process for stakeholder communication that establishes the groundwork for future empirical investigation and analysis.

Accounting for Market Equilibrium – Comparing the Revenue-Expense to the Balance-Sheet Approach

2019 ◽  
Vol 0 (0) ◽  
Author(s):  
Eduard Braun
Keyword(s):  
Financial Reporting ◽  
Market Equilibrium ◽  
Balance Sheet ◽  
Fair Value ◽  
Financial Accounting ◽  
Market Process ◽  
Net Income ◽  
Fair Value Accounting ◽  
Suitable Framework ◽  
Value Measurement

AbstractThis paper combines the market process approach developed by the Austrian School of Economics with the theory of capital as worked out by the Historical School in order to provide a suitable framework for discussing the two competing approaches to financial accounting. Within this framework, it becomes clear that the revenue-expense approach with its emphasis on actually realized, historical transactions plays an important role in creating a tendency towards market equilibrium. Net income determined according to this approach provides information to the market on where there are gaps in the price structure. The balance-sheet approach, on the other hand, and particularly fair value measurement take market equilibrium for granted. Based on fair value accounting, an equilibrium could never be accomplished in the first place. Ironically, in order to be applicable, the balance-sheet approach presupposes the perfect working of the market process, including financial reporting based on the revenue-expense approach.

scholarly journals Cryptocurrency Assets in the Financial Accounting Systems

2020 ◽  
Vol 3 (45) ◽  
pp. 184-189
Author(s):  
A. A. Makurin ◽  
Keyword(s):  
Financial Reporting ◽  
Intangible Assets ◽  
Balance Sheet ◽  
Fair Value ◽  
Financial Accounting ◽  
Accounting Systems ◽  
Financial Investment ◽  
Financial Reporting Standards ◽  
The One ◽  
Definition Of

The article deals with constructing an asset accounting process and an algorithm for recognizing an object as an asset. The main approaches to the reflection of cryptocurrency in financial accounting are analyzed. The study showed that International Financial Reporting Standards (IFRS) still lack specific clarifications on the correctness of accounting and recognition of cryptocurrencies. Cryptocurrencies are suggested to be recognized as, intangible assets on the one hand, and as inventories, on the other. The research shows that before starting the process of accounting for any asset, it is necessary to determine, whether such a resource meets the definition of an asset. The article proves that cryptocurrency is an asset. However, attaching cryptocurrency to a certain group of assets turns out to be rather problematic. The main approaches to doing it are analyzed. Speaking formally, cryptocurrency is considered to be cash or cash equivalents. Cash and cryptocurrencies have been compared, and the main distinguishing features of these two assets have been considered. The conclusion is made that cryptocurrency should be evaluated at fair value, indicating the date of evaluation to fix actual market conditions. The measure of cryptocurrency when reflected in the financial reporting is the US dollar or its equivalent in the national currency as at the balance sheet date. The research has shown that depending on the type of the enterprise activity, cryptocurrency should be determined in the financial reporting, or the «balance sheet», as «intangible assets» (line code 1000), and the primary value of such an asset corresponds to line 1001, or inventories (line code 1100). Also, if the company’s accounting policy states that cryptocurrency is a financial investment, it should be reflected in line 1160.

scholarly journals Valuing An Emerging International Technology Company

2011 ◽  
Vol 7 (1) ◽  
Author(s):  
John Zimmerman
Keyword(s):  
Balance Sheet ◽  
Cumulative Effect ◽  
Fair Value ◽  
Financial Accounting ◽  
Publicly Traded ◽  
Accounting Standard ◽  
Financial Valuation ◽  
Accounting Principle ◽  
Fair Valuation ◽  
Interim Period

The requirements of Financial Accounting Standard Board (FASB) 142 provide an excellent opportunity to examine various financial valuation methods used to determine a company’s value.  Under FASB 142, goodwill and intangible assets with indefinite useful lives are no longer amortized, but instead tested for impairment at least annually in accordance with the provisions. Any impairment loss has to be measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle in an organization’s first interim period. The impairment test requires an accurate and fair valuation of the asset in question.  This case is based upon the valuation dilemma faced by Integrated Silicon Solution (NASDAQ: ISSI), a publicly traded international technology company, in late 2008. ISSI had made several acquisitions and carried substantial goodwill. Since ISSI was publicly traded, a public market value was available but the financial crisis of 2008 caused the company to consider other methods, as is allowed under FASB 142. The case uses both the income and comparable market approaches to arrive at a fair value, and this value is used to determine if impairment for the goodwill the company carried on its balance sheet existed.

A Perspective on the Joint IASB/FASB Exposure Draft on Accounting for Leases

2011 ◽  
Vol 25 (4) ◽  
pp. 861-871 ◽  
Author(s):  
Yuri Biondi ◽  
Robert J. Bloomfield ◽  
Jonathan C. Glover ◽  
Karim Jamal ◽  
James A. Ohlson ◽  
...  
Keyword(s):  
Balance Sheet ◽  
Accounting Standards ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Financial Accounting Standards Board ◽  
Operating Leases ◽  
Key Issues ◽  
Definition Of ◽  
The Impact ◽  
Lease Accounting

SYNOPSIS The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) recently issued a joint exposure draft on accounting for leases. This exposure draft seeks to shift lease accounting from an “ownership” model to a “right-of-use” model. Under the current ownership model, leases can be reported on balance sheet (finance leases) if certain tests are met, or off balance sheet (operating leases) if those tests are not met. The new model seeks to report all leases on the balance sheet based on the present value of lease obligations without any bright line tests, and no sharp on or off the balance sheet classifications. We are sympathetic to the standard setters' concern that the current lease standard is being manipulated improperly by managers, resulting in large amounts of debt being reported off balance sheet. We provide a discussion of current lease accounting and the proposed exposure draft. We also comment on five key issues covered by the exposure draft: the definition of a lease, the initial measurement and eventual reassessment at fair values, the accounting for lessors, the impact of lease accounting on recognition and income measurement, and classification of lease accounting elements and their impact on accounting ratios. JEL Classifications: M40.

scholarly journals UNDERSTANDING BIG DATA-FAIR VALUE MEASUREMENT MODEL OF BIOLOGICAL ASSETS

2021 ◽  
Vol 6 (24) ◽  
pp. 01-08
Author(s):  
Nurshahirah Salehuddin ◽  
Suraiya Ibrahim ◽  
Wan Salha Yusoff
Keyword(s):  
Big Data ◽  
Agricultural Sector ◽  
Fair Value ◽  
Measurement Model ◽  
Biological Properties ◽  
Agriculture Sector ◽  
Daunting Task ◽  
Fair Value Measurement ◽  
The Cost ◽  
Value Measurement

This research establishes a Big Data-Fair Value Measurement Model of Biological Assets using a Smart Farming Approach. The aim of the study is to gather literature knowledge about the judgment of biological assets. The use of big data and innovative farming in the agricultural sector is relatively new in Malaysia, making people wonder about its effectiveness, whether positive or negative. However, determining fair value can be a daunting task due to the existence of personal biological properties and the variety of specimens (offspring), classes, and conditions. Agricultural sectors need to be more emphasised by many parties as the increases in cost production is not a trivial matter that can be ignored. There have been pressures from foreign countries such as Thailand, Vietnam, and Indonesia in the agricultural sector. Malaysia faces one major challenge: the cost of production, including wages and inputs, is relatively higher. (Rozhan 2019). Agricultural accounting is a minor standard, but it has a broad scope and a significant impact on agricultural businesses based on the accounting perspective, the MFRS141/IAS 41. The standard improves the transparency of the cost to replace capital (by allowing for depreciation and amortisation) and better reflects the productive lifespan of assets in agricultural operations. However, the application of MFRS 141 Agriculture is still relatively new in Malaysia, and a thorough examination of the literature indicates several gaps and deficiencies. This literature review is vital to support the study on Big Data-Fair Value Measurement Model of Biological Assets as the agricultural sector's involvement was recently popular. It might also offer some good ideas for handling problems involving the fair value measurement. Future studies will help the Ministry of Agriculture and Food Industries, agriculture sector workers, in terms of practical perspective. Therefore, the future result of the study suggests an improvement within the agriculture sector related to the treatment in their fair values, issues, and strategies.

scholarly journals The Financial Accounting Standards Board’s Fair Value Mandate: Are Level 3 Assets and Liabilities Being Measured Accurately?

2018 ◽  
Vol 7 (2) ◽  
pp. 33
Author(s):  
Robert J. Cochran
Keyword(s):  
Financial Institutions ◽  
Balance Sheet ◽  
Accounting Standards ◽  
Market Value ◽  
Fair Value ◽  
Financial Accounting ◽  
Mortgage Loan ◽  
Specific Level ◽  
Additional Argument ◽  
Level 3

This study asks the following question with respect to level 3 fair value assets and liabilities: are level 3 fair value assets and liabilities being measured accurately?  An argument is made that since level 3 markets do not exist (as defined in ASC 820), it is not possible to determine a level 3 value.  Data is examined, both pre- and post- SFAS No. 157 with respect to a specific level 3 asset that can be found on the balance sheet of most publically traded financial institutions, mortgage loan servicing rights.  The data suggests that the FASB’s attempt to clarify fair value had no effect on the levels of capitalization of mortgage loan servicing rights.  An additional argument is made that the language in ASC 820 undermines the requirement that level 3 fair values reflect a “market” value rather than an “investment” value.

scholarly journals Financial Accounting Measurement Model Based on Numerical Analysis of Rigid Normal Differential Equation and Rigid Functional Equation

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Zhihua Yan ◽  
Bahjat Fakieh ◽  
Ragab Ibrahim Ismail
Keyword(s):  
Differential Equation ◽  
Functional Equation ◽  
Numerical Analysis ◽  
Functional Differential Equations ◽  
Fair Value ◽  
Measurement Model ◽  
Financial Accounting ◽  
Accounting Measurement ◽  
Functional Differential ◽  
The Stability

Abstract The initial value problem of stiff functional differential equations often appears in many fields such as automatic control, economics and its theoretical and algorithmic research is of unquestionable importance. The paper proposes a rigid functional equation based on the integral process method of the financial accounting measurement model of numerical analysis. This method provides a unified theoretical basis for the stability analysis of the solution of the functional differential equation encountered in the integrodifferential equation and the financial accounting fair value measurement model of investment real estate.

Revised Model for Presentation in Statement(s) of Financial Performance: Potential Implications for Measurement in the Conceptual Framework

2016 ◽  
Vol 30 (4) ◽  
pp. 485-498 ◽  
Author(s):  
Thomas J. Linsmeier
Keyword(s):  
Financial Performance ◽  
Relevant Information ◽  
Fair Value ◽  
Measurement Model ◽  
Financial Assets ◽  
Historical Cost ◽  
Performance Reporting ◽  
Other Comprehensive Income ◽  
Potential Basis ◽  
Value Measurement

SYNOPSIS: Current financial performance reporting has led to a focus on earnings per share and a proliferation of both non-GAAP measures and items reported in other comprehensive income. I examine characteristics of some of the more common non-GAAP earnings adjustments to propose a financial performance reporting model that consistently presents information with those characteristics separately. This reporting model focuses on distinguishing operating results from nonoperating results and within those categories presenting recurring amounts separately from nonrecurring amounts. I next explore potential implications for measurement. This analysis identifies conditions when the recognition of incremental unrealized gains or losses (UGLs) in income under a fair value measurement model improves relevance of reported information. The analysis suggests that UGLs provide most relevant information when there are no internal or external constraints affecting management's ability to sell an asset or transfer a liability before maturity or the end of its useful life. When assets/liabilities are constrained from being sold/transferred before maturity or the end of their useful lives, reported UGLs will reverse to zero over time, limiting relevance. This analysis supports measurement of financial assets and investment properties at fair value and provides a potential basis for measuring other assets and liabilities at historical cost.

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