Browsing by Author "Lampinen, Laura"

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The accounting and reporting of internally generated intangible assets
(2018) Lampinen, Laura
School of Business | Bachelor's thesis
Intangible assets have become increasingly important for the businesses. The growth of the IT and game industries, and the growth of digitalisation both intensively increase the prevalence of the intangible assets. Also the internally generated intangible assets have become more important, as such assets as mobile games or patents can be the core of the business and be a significant part of the company’s assets. This brings up the importance of understanding the accounting and report- ing of the internally generated intangible assets. This study was to examine the standards for the accounting of internally generated intangible assets on IAS 38 of IFRS. Also the reporting of internally generated intangible assets on the finan- cial statements was to be examined, in order to get a wider understanding of the phenomenon and the practice of it. The accounting standards for internally generated intangible assets were presented on IAS 38 of IFRS. The standard included the defining, capitalising, cost measuring and value defining of an internally generated intangible asset. IAS 38 allowed the capitalisation, if certain criteria for the recognising and capitalising of an intangible asset were met. The criteria to be met, in order for recognising an intangible asset, were identifiability, economical beneficialness, controllability and non-monetarity. In order to capitalise an internally generated intangible asset, also the costs need- ed to be realiably measured. This required the separation of research- and development phase costs. Only costs occurred on development phase were allowed for the capitalisation, after meeting certain criteria. The capitalised asset was to be presented on the balance sheet either as on the cost less accumulated amortisations or impairment tests, or as on the fair value. To examine the reporting of internally generated intangible assets, the financial statements of 32 public companies from different industries were studied. The study showed that the reporting of internally generated intangible assets is not common or systematic. Only 8 of the companies re- portedly capitalised internally generated intangible assets. The information of the capitalised in- ternally generated intangible assets was very general and meagre, and mostly about to what area the costs capitalised were related to. The outcome of the study is, that the standards presented for the accounting of the internally generated intangible assets are strict and ambiguous. For example, the defining of probable future economic benefits and the measuring of costs can be very subjective. Also the uniqueness of an internally generated intangible asset brings up problems like the lack of active markets to define the fair value. And as the reporting of internally generated intangible assets was very meagre, it can be assumed that the capitalisation of the internally generated intangible assets is not very common, and the troublesome interpretation of the accounting standards can partly be the reason.
Management Estimates of the Weighted Average Cost of Capital - Evidence from Goodwill Impairment tests
(2020) Lampinen, Laura
School of Business | Master's thesis