Is Non-Recognition of Internally Generated Intangible Assets Materially Understating the Value of U.S. Companies?

• In Event: Breakfast with Research Roundtable Forum Session
  In Paper Session: Roundtable 4: Financial Accounting III

Abstract

Since the dawn of the Information Age, which has dramatic differences from the previous Industrial Revolution Age, valuation issues of intangible assets have generated many conceptual issues for accounting standard setters. The easiest way to deal with this is to ignore internally-generated intangible assets and only recognize these assets when externally obtained. However, the accounting profession itself is increasingly aware of the necessity to confront the knowledge-driven economy and recognizes that reporting systems have to be developed that reflect the increasing importance intangible asset have to organizations. In this paper we examine the issues surrounding the potential for reporting on internally generated intangible assets and the successful outcomes that could possibly result from such reporting.

Authors

• Shifei Chung, Rowan University

• Ramesh Narasimhan, Montclair State University