Financial Reporting of Intellectual Property Holdings for Australian Listed Companies

摘要

The history of Australian accounting standards and financial reporting of intellectual property demonstrates some of the difficulties encountered by standard setters when dealing with innovative assets of high value and importance. Innovative financial assets in the form of various types of intellectual property have provided fertile ground for somewhat controversial measures for valuation and financial reporting. Intangible assets in the past have been categorised as either "identifiable", such as patents, trade marks, copyright, mastheads and registered designs, or "unidentifiable", the most common being goodwill. With the adoption of the new accounting standards, the specific categories of intellectual property may well now be replaced with the more generic label of "intangible asset".rnThe new accounting standards further reinforce the use of amortised cost as frontrunner of valuation methodologies for intangible assets, including all types of intellectual property. The absence of a verifiable active market for many types of intangibles negates the use of alternative valuation models on the grounds of market transparency. Moreover, the new standards reduce the breadth of reportable intellectual property assets to investors. Instead of recognising incurred expenditure on an intangible as an asset in the entity's balance sheet, the reported outcome would ordinarily be recognised as an expense in the entity's profit and loss statement. The likely effect for reporting entities and listed companies would be for lower reported profit and lower reported assets. Consequently, investors may not respond kindly to entities that have incurred high expenditure on intangibles. Temptation may lead to some entities mislabelling or, worse, not reporting expenditures on intangibles in their financial reports. This, in turn, may reduce the quality of information being relayed to investors who rely on accurate and detailed descriptions contained in the company's financial reports.