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Accounting for intellectual property?

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  • Ghafele, Roya

Abstract

Accounting constitutes a very specific form of language, which is highly standardized, mathematical in nature and seeks to uniformly and systematically describe events while avoiding expressions of individual creativity or explicit political positions. In this sense, accounting is a social, cultural and historical artefact rather than a natural or technical phenomenon and can therefore be viewed as the decisive instrument to create and maintain imagined business communities. On the balance sheet, IP experiences a specific form of authorization. It is represented in the discourse of accounting by ‘intangibles’, an imprecise term associated with the increasingly observed ‘gap between the market and book value’, while current accounting systems are determined by a tangible assets’ based perspective and offer little scope to document how IP relates to business performance. Accounting may thus be seen as a gate keeper of the status quo that poses significant challenges for IP-rich companies, confronted with the challenge to either communicate around the lingua franca of accounting or accept that under current accounting statements they cannot adequately document how IP relates to their business performance.

Suggested Citation

  • Ghafele, Roya, 2010. "Accounting for intellectual property?," MPRA Paper 37360, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37360
    as

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    File URL: https://mpra.ub.uni-muenchen.de/37360/1/MPRA_paper_37360.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    intellectual property; financial reporting; intangible assets mapping; accounting;
    All these keywords.

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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